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Working Paper
Effective tax rates and measures of business size
This paper uses data from the Survey of Consumer Finances (SCF) and the NBER TAXSIM model to estimate marginal and average tax rates for households that own businesses that are pass-thru entities. We examine how marginal and average tax rates vary by the size of business using four different measures of the size: net income, gross receipts, business value, and number of employees. The analysis also uses the long-time series of SCF cross-sections to examine how tax rates for business owners have evolved over the various changes in tax policy of the last two decades.
Working Paper
Banking market definition: evidence from the Survey of Consumer Finances
This paper uses data from the triennial waves of the Survey of Consumer Finances from 1992 to 2004 to examine changes in the use of financial services with implications for the definition of banking markets. Despite powerful technological and regulatory shifts over this period, households' banking markets overall remained largely local--the median distance to a provider of financial services remained under four miles. However, there has been rapid growth in the use of non-depository financial institutions over the period, particularly non-local ones. This increase occurred across a wide ...
Journal Article
Changes in U.S. Family Finances from 2013 to 2016: Evidence from the Survey of Consumer Finances
Evidence from the Survey of Consumer Finances The Federal Reserve Board's Survey of Consumer Finances for 2016 provides insights into the evolution of family income and net worth since the previous time the survey was conducted, in 2013. The survey shows that, over the 2013-16 period, the median value of real (inflation-adjusted) family income before taxes rose 10 percent, and mean income increased 14 percent. Real median net worth increased 16 percent, and mean net worth increased 26 percent. The data also indicate that gains in income and net worth are broad based, occurring across many ...
Working Paper
The COVID-19 Pandemic and Family Economic Well-being: Evidence from the Survey of Consumer Finances
The COVID-19 pandemic caused severe disruptions to the U.S. labor market and economic activity. We establish connections between family experiences of the pandemic, their income under normal conditions, and their later economic well-being using the 2022 Survey of Consumer Finances. By their interview, one-third of families experienced net employment declines, one-third had teleworked, and one-fifth had significant COVID-19-related health events. These experiences strongly reflected families’ positions in the income distribution, with lower-income families bearing the brunt. They also ...
Journal Article
Changes in U.S. family finances from 2007 to 2010: evidence from the Survey of Consumer Finances
The Federal Reserve Board's Survey of Consumer Finances for 2010 provides insights into changes in family income and net worth since the 2007 survey. The survey shows that, over the 2007?10 period, the median value of real (inflation-adjusted) family income before taxes fell 7.7 percent, while mean income fell more sharply, an 11.1 percent decline. Both median and mean net worth decreased even more dramatically than income over this period, though the relative movements in the median and the mean are reversed; the median fell 38.8 percent, and the mean fell 14.7 percent. This article reviews ...
Working Paper
Updates to the Sampling of Wealthy Families in the Survey of Consumer Finances
Participation in household surveys has fallen over time, making it harder to produce a household survey-like the Survey of Consumer Finances (SCF)-in a timely manner. To address these challenges, the reference year of the sampling frame data for the 2016 SCF wealthy oversample was shifted back one year, allowing the oversample to be selected earlier than the past. In implementing this change, though, we risk identifying an outdated set of families and introducing variability in the sampling process. However, we show that the set of families selected in the new frame are observationally ...
Working Paper
Wealth Distribution and Retirement Preparation among Early Savers
This paper develops a new combined-wealth measure by augmenting data on net worth from the Survey of Consumer Finances with estimates of defined benefit (DB) pension and expected Social Security wealth. We use this concept to explore retirement preparation among two groups of households in pre-retirement years (aged 40 through 49 and 50 through 59), and to explore the concentration of wealth. We find evidence of moderate, but rising, shortfalls in retirement preparation. We also show that including DB pension and Social Security wealth results in markedly lower measures of wealth ...
Working Paper
Wealth Concentration in the United States Using an Expanded Measure of Net Worth
Defined benefit (DB) pensions and Social Security are two important resources for financing retirement in the United States. However, these illiquid, non-market forms of wealth are typically excluded from measures of net worth. To the extent that these broadly held resources substitute for savings, measures of wealth inequality that do not account for DB pensions and Social Security may be overstated. This paper develops an alternative, expanded wealth concept, augmenting precise net worth data from the Survey of Consumer Finances with estimates of DB pension and expected Social Security ...
Working Paper
Do liquidity constraints matter for new entrepreneurs?
Numerous studies have found a positive relationship between wealth and entering entrepreneurship, and interpret this as evidence of the existence of liquidity constraints. However, recent research has shown that the relationship between wealth and entering entrepreneurship may be non-linear and only significant for high-wealth households; this result cannot be interpreted as evidence of liquidity constraints. Using data from the SCF, we construct a proxy for wealth based on the household's home equity wealth at the time of the entrepreneurial decision. The results provide further evidence ...
Journal Article
Changes in U.S. family finances from 2007 to 2010: evidence from the Survey of Consumer Finances
The Federal Reserve Board's Survey of Consumer Finances for 2010 provides insights into changes in family income and net worth since the 2007 survey. The survey shows that, over the 2007?10 period, the median value of real (inflation-adjusted) family income before taxes fell 7.7 percent, while mean income fell more sharply, an 11.1 percent decline. Both median and mean net worth decreased even more dramatically than income over this period, though the relative movements in the median and the mean are reversed; the median fell 38.8 percent, and the mean fell 14.7 percent. This article reviews ...