What Roles Do Age and Birth Year Play in Income and Wealth?
Typically, young families start out with little (or perhaps negative) wealth, accumulate more wealth during middle-age, then peak and begin to draw down on their wealth in old age. Older people would naturally be expected to have more wealth than younger people, given this path.
However, the wealth gap between the old and young has widened considerably. And the Baby Boomer generation, which is currently entering retirement en masse, are likely to be less wealthy than the generation before them.
In this video, William Emmons, Bryan Noeth and Ray Boshara—of the St. Louis Fed’s Center for Household Financial Stability—discuss their findings on the connections between age and wealth. They present the findings of their paper “Age, Birth Year and Wealth,” which is the final part of their “Demographics of Wealth” series. Their research on the effects of race/ethnicity and education are also available.
- Center for Household Financial Stability: The Demographics of Wealth: Age, Birth Year and Wealth
- On the Economy: Wages Aren’t Keeping Up with Economic Growth
- On the Economy: Does a Falling Unemployment Rate Imply Rising Wages?