Academic journal article Monthly Labor Review

Which Households Lost the Most in the Recession?

Academic journal article Monthly Labor Review

Which Households Lost the Most in the Recession?

Article excerpt

Every family was affected in one way or another by the recent "Great Recession," but certain population groups were affected more than others. In their article titled "Household Financial Stability: Who Suffered the Most from the Crisis?" William R. Emmons and Bryan J. Noeth investigate which demographic groups experienced the greatest recessionary declines in net worth (The Regional Economist, July 2012, The Federal Reserve Bank of St. Louis, http://www.stlouisfed.org/ publications/re/articles/?id=2254).

The researchers focused on the race, ethnicity, age, and college-degree attainment of households by using the Federal Reserve's triennial Survey of Consumer Finances. The study showed that, between 2007 and 2010, the median loss in net worth of all households surveyed was 39.1 percent. Wealthier and older households lost the largest sums of money during the recession, primarily because they had more to lose and their equity was concentrated in investments. The most severe loss of wealth in percentage terms, however, was experienced by historically disadvantaged minority families (defined in the study as African-American or Hispanic of any race). The study also found that "young" (younger than age 40) and "middle-aged" (ages 40 through 54) groups experienced larger percentage declines in net worth compared with their "old" (55 years or older) counterparts. …

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