Wealth (2024)

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Introduction

Sociological research on stratification and economic well-being in industrial nations has focused, almost exclusively, on human capital and labor market attainment as key determinants of class, status, and power. In recent years, a growing number of scholars have acknowledged the unique qualities of personal wealth as a measure of socioeconomic status and quality of life and have called for the incorporation of wealth into the relevant models of socioeconomic attainment. An increase in the availability of reliable data with detailed information on household savings behavior, consumption patterns, and intergenerational wealth transfers has led to a significant rise in the number and quality of sociological studies on wealth. Typically defined as net worth, or the total sum of household assets minus outstanding liabilities, wealth represents command over a stock of economic resources and opportunities; it provides people with greater financial comfort and security in times of crisis such as illness, disability, or the loss of a job. Wealth can be used as collateral for loans to finance consumption, purchase a home, start a business, or invest in human capital. Among asset holders, ownership of financial assets is a valuable source of income. The intergenerational transmission of wealth in the form of inter vivos gifts and bequests is an important mechanism of investment in children’s human capital and economic well-being and has significant implications for the reproduction of economic inequality. Owning wealth has also been linked to, and in some studies has been implicated as an important determinant of, peoples’ health status, savings and consumption patterns, mate selection, political influence, social standing, and subjective well-being. Understanding how personal wealth is created, accumulated, and transferred is a particularly challenging task, as these processes are determined by a complex interplay of macrolevel contexts and individual- and household-level characteristics such as age, occupation, and marital history. Consequently, the scholarship on wealth is interdisciplinary, and sociological research has significantly contributed to this growing literature. As is often the case with a review of academic literature in a particular field, this article is limited in scope. The entries include works published mainly by sociologists and/or in sociological journals, and reflect the current state of research. The cited articles are largely empirical-quantitative, and focus on microlevel processes of wealth accumulation in affluent societies. The strong emphasis on the United States reflects the volume of scholarship on American wealth patterns. When the sociological scholarship is limited, relevant works in related fields are cited.

Datasets

Much of the empirical evidence on household net worth comes from survey data. The recent increase in the number of studies and publications on wealth has been largely attributed to the availability of detailed information from a relatively small number of surveys that collect information on the type and value of assets (e.g., main residence, stocks, bonds, retirement plans, saving accounts) owned by households. Some surveys also include questions on parental resources and/or inquire about the timing and amount of financial gifts and bequests that the participants have received. Similarly, respondents are questioned on any financial transfers they have given or are planning to pass on in the future. This information, in conjunction with the relevant demographic (e.g., age, marital status, racial and ethnic origin) and socioeconomic indicators—such as level of education, employment, and earnings—provide the researchers with a comprehensive picture of household net worth and microlevel processes of wealth buildup. The Panel Study of Income Dynamics (PSID) and Survey of Consumer Finances (SCF) are generally considered the most reliable sources on household wealth in the United States. The main objective of the Survey of Income and Program Participation (SIPP) is to provide information on income and social program participation of individuals and households, but the survey also collects data on assets and liabilities. The Wealth and Assets Survey is one of the key sources of data on asset ownership and wealth holdings in the United Kingdom, while data from the Health and Retirement Survey (HRS) and the Survey of Health, Ageing and Retirement in Europe (SHARE) are often used to investigate the social and economic well-being of older American and European households, respectively. Two additional datasets—the Luxembourg Wealth Study (LWS) and the Eurosystem Household Finance and Consumption Survey (HFCS)—are particularly suitable for comparative research on assets and wealth in affluent societies.

• The Eurosystem Household Finance and Consumption Survey (HFCS).

  The first wave of the HFCS, carried out between 2008 and 2011, was conducted in 15 European countries with a sample of over 60000 households. Participating countries coordinate the definitions of key variables while adapting to country-specific contexts. In addition to demographic characteristics, the survey provides detailed household-level data on assets, wealth, liabilities, intergenerational transfers, and consumption.

  See Also

  What does it take to be wealthy? Well-being is a more important measure than money or assets, survey findsHere's what 'wealthy' means in 2023 America, in five numbersWealth - Definition, What is Wealth, Advantages of Wealth, and Latest News - ClearTaxReal Wealth Is An Abundance of What is Truly Valuable — Time And Freedom

• Health and Retirement Survey (HRS).

  A longitudinal panel survey administered to a representative sample of American adults over the age of 50. The survey was launch in 1992 and the questionnaire covers topics such as family structure, physical and mental health, work and retirement planning, and wealth and intergenerational transfers.

• The Luxembourg Wealth Study (LWS).

  Launched in 2007, the LWS provides microlevel data on household net worth in twelve countries. As these surveys were essentially designed to meet particular country-level needs, the WLS datasets were harmonized into a common template to foster comparability and improve cross-national analysis of households’ wealth, asset ownership, debt, and expenditures.

• Panel Study of Income Dynamics (PSID).

  Data collection of this longitudinal household survey started in 1968, with a sample of about 18000 US residents from almost 5000 families. Since 1997 the survey has been administered biennially. The PSID oversamples low-income families and collects information on net worth, retirement plans, consumption patterns, assets and liabilities, and philanthropy.

• Survey of Consumer Finances (SCF).

  This is a cross-sectional survey of US families that includes detailed information on family finances, asset holdings, pension coverage, and receipt of financial gifts and bequests. To more accurately represent the distribution of wealth in the population, the SCF over-samples wealthy households. In recent years the survey has included approximately 6000 families.

• Survey of Health, Ageing and Retirement in Europe (SHARE).

  See Also

  Conspicuous Consumption: Definition and Examples

  Modeled after the HRS, SHARE has collected data from more than 100000 people over 50 years of age who are living in 19 European countries and Israel. Topics include demographic and socioeconomic attributes, kinship and social networks, health status, asset ownership, and wealth. Data from the fifth wave of the survey were released in 2015.

• Survey of Income and Program Participation (SIPP).

  The main objective of this longitudinal survey is to provide information on household income and participation in social welfare programs. The survey includes a wealth module with detailed information on household assets and liabilities.

• The Wealth and Assets Survey.

  Launched in 2006, the WAS is a longitudinal survey of private households in the United Kingdom. In addition to demographic and socioeconomic characteristics, the survey collects detailed information on assets and wealth, including homeownership, financial assets and liabilities, and private pension wealth.

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