Recap:
Edward Wolff is an economics professor at New York University. In keeping with his professional focus on wealth and wealth disparity, Wolff recently authored The Extraordinary Rise in the Wealth of Older American Households (NBER, 2025). Here’s the Abstract from that paper:
“There has been a seismic shift in age-wealth profiles in the U.S. over years 1983 to 2022. The most notable is the sharp rise in the relative household wealth of age group 75 and over. Correspondingly, the relative wealth holdings of all other age groups dropped over these years. Using the Survey of Consumer Finances, the paper focuses on the youngest age group, 35 and under, and the oldest age group, 75 and over, and analyzes the factors behind these relative shifts in wealth. I find that the three principal factors are the homeownership rate, total stocks directly and indirectly owned, and home mortgage debt. The homeownership rate is the same in the two years for the youngest group but falls relative to the overall rate, whereas it shoots up for the oldest group both in actual level and relative to the overall average. The value of stock holdings rises for both age groups but vastly more for the oldest households compared to the youngest ones and accounts for a substantial portion of the elderly’s relative wealth gains. Mortgage debt rises in dollar terms for both groups but considerably more in relative terms for the youngest group.”
This series of posts include charts that document Wolff’s main points: the growing age-wealth gap has been growing for decades and is huge; and that differences in homeownership, stock holdings, and mortgage debt are the three main factors behind the age-related shift in relative wealth. The charts are my own creation, based on Wolff’s computations and tables.
I have created several charts based on Wolff’s data and computations. The chart in the first post of this series documented the growing age-wealth gap over the period of 1983-2022. The chart in the second post revealed the diverging homeownership gap over the same period. This post addresses role played by stock ownership in the growing age-wealth gap, specifically “total stocks directly and indirectly owned”. Since stocks typically account for around half or more of the value of financial assets such as mutual funds and personal trusts, I’ll be using Wolff’s data on financial assets as a proxy for total stocks directly and indirectly owned.
Given the centrality of financial assets to the age-wealth gap, I created two charts for this post: one, the percent of household wealth attributable to financial assets, by age-group; and two, the average annual rate of return on financial assets over the period of 1983-2022, compared to other types of assets:
Note that pensions also have a high rate of return - probably because pension portfolios tend to allocate a significant chunk of their assets to stocks.
Next: Mortgage debt
Reference:
Wolff, Edward N. The Extraordinary Rise in the Wealth of Older American Households. No. w34131. National Bureau of Economic Research, 2025. DOI: 10.3386/w34131