Research by Author & Topic

Publications by Sheila R. Zedlewski on Income and Wealth Distribution

Americans save for retirement by building wealth in personal accounts, home equity, pension plans, retirement accounts and Social Security. We use data from the Survey of Consumer Finances (SCF) and methods to estimate the wealth values of Social Security and pension plans to show how wealth builds over the life cycle. We find that the typical household accrues wealth throughout the life cycle. Households in the bottom income quintile, those that did not complete high school and minorities accumulate much less wealth than their counterparts, and Social Security accounts for a large share of their preretirement wealth.

The slumping stock market, falling housing prices, and weakening economy have serious repercussions for older Americans who are approaching retirement or already retired. Seniors have little time to recoup the values of their homes, 401(k) plans, and individual retirement accounts-all important parts of their retirement nest eggs. More and more older adults are working to bolster their retirement incomes, but the rising unemployment rate limits their prospects. This fact sheet examines the impact of the ongoing economic turmoil on retirement savings, home values, and retirement decisions.

Retirees who want to stay in their homes can tap into home equity through a reverse annuity mortgage that pays them a tax-free monthly payment. We show that conversion of home equity into a reliable income stream could provide a significant boost in retirement income, particularly for low-income homeowners with significant equity. The cost of initiating a RAM, however, and many older adults' concerns about borrowing against this asset have limited interest in RAMs. Recent turmoil in the mortgage market and declines in home prices raise additional uncertainties about the potential for using home equity to boost retirement incomes.

The Census Bureau’s official poverty measure no longer reflects the true resources or needs of adults age 65 and older. Recent consumption data show that older adults generally require more to cover their basic needs and economic data show that older adults have more resources than are reflected in the official poverty measure. This paper shows the sensitivity of poverty rates for older adults to alternative measures of consumption needs and income resources. The alternative measures all show that number of older adults living in poverty is greater than the official measure indicates.

Tax rates can affect decisions regarding work, investment in human capital, and wealth accumulation, each of which modulates intra- and intergenerational economic mobility. Similarly, government spending affects mobility either by purchasing goods that may drive mobility, such as education and health, or by effectively lowering the cost of mobility-enhancing goods through tax deductions and credits. This review summarizes the literature on the effects of government tax and spending policy on economic mobility, with a focus on the impacts of changes in marginal tax rates, the tax treatment of wealth, and government spending on health care, education, and Social Security. (Review 10 of 11.)

This paper examines how a budget reconciliation bill under the Balanced Budget Act of 1995 would affect social welfare programs, taxes, and family income by using the Urban Institute's TRIM2 microsimulation model. Topics covered include (1) how current government programs assist families; (2) how the reconciliation bill would affect families; (3) the aggregate effects of changes in government spending and taxes; (4) effects on total family income; and (5) effects on poverty. The study does not consider the bill's proposed changes in government health programs nor does it include the effects of reductions in capital gains taxes.

This paper examines the potential effects of the Clinton Administration's proposed Health Security Act on employment and wages. The Transfer Income Model (TRIM2) evaluated the provisions of the plan. The model allows for the description of the distribution of employment and wage effects, as well as the distribution of health insurance costs and subsidies in the current system and under reform. A number of possible short-term effects related to changes in employer costs are estimated. The report also discusses other possible labor-market effects of the plan.