The causes and consequences of income and wealth inequality are central concerns in economic research and policy discussions. This column presents findings from the 2022 Survey of Consumer Finances on the state of US economic inequality. Three key patterns emerge: wealth remains highly concentrated, younger generations are accumulating less wealth than their predecessors, and wealth inequality has modestly declined since 2016 due to housing price gains that benefited middle-class households but did not extend to the bottom of the distribution. These findings highlight how as-set price movements and portfolio differences can reshape inequality in complex ways, as well as the importance of wealth-building policies that extend beyond homeownership.
Using the latest data from the 2022 Survey of Consumer Finances (SCF), we document the current state and recent evolution of earnings, income, and wealth inequality in the US (Kuhn and Ríos-Rull 2025). Our analysis updates a series of studies tracking these distributions over several decades (Díaz-Gimenez et al. 1997, Budría et al. 2002, Díaz-Giménez et al. 2011, Kuhn and Rios-Rull 2016).
Three fundamental facts characterise inequality in 2022. First, wealth remains far more concentrated than income or earnings, with Gini coefficients of 0.83, 0.61, and 0.68 respectively. The top 1% of households control 35% of wealth, 22% of income, and 18% of earnings. Second, entering the top 1% requires $13.6 million in wealth, while the median household holds just $193,000 – a ratio of 68 to 1. Third, approximately 8% of US households have zero or negative net worth, highlighting persistent financial fragility at the bottom of the distribution.
A generational divide in wealth accumulation
One of our most concerning findings involves generational differences in wealth accumulation. Extending our analysis back to 1950 using historical SCF data, we find that younger cohorts consistently accumulate less wealth than previous generations did at the same age, despite having similar or higher incomes.
For example, at age 50, households born in the 1970s have accumulated only about 60% of the wealth that households born in the 1940s had at the same age (adjusted for inflation). This gap cannot be explained by income differences – younger generations earn as much or more than their predecessors. Instead, it reflects different economic environments, including changes in housing affordability, student debt burdens, and asset price trajectories during key wealth-building years.
The baby boom generation (born 1940–1960) stands out as particularly fortunate in wealth accumulation. Their wealth quadrupled between ages 40 and 60, driven by favourable asset price developments during their peak earning years. No subsequent generation has experienced comparable wealth growth rates.
The 2016–2022 reversal: Middle gains, persistent struggles below
Our analysis reveals a modest but notable reversal in wealth concentration since 2016. The top 1% wealth share declined from 39% to 35%, while the wealth Gini coefficient fell from 0.86 to 0.83. This represents the first sustained decline in wealth concentration since the modern SCF data became available in 1989.
This reversal stems from differential asset price movements and portfolio compositions. Middle-class households (50th–90th percentiles) hold about 60% of their wealth in housing, compared to just 7% for the top 1%. Between 2016 and 2022, house prices rose by over 40%, substantially outpacing stock market gains. Our decomposition shows that virtually all housing wealth gains came from price appreciation rather than additional household investment.
However, this improvement has been unevenly distributed. While middle-class households benefited from housing appreciation, those in the bottom 50% saw little improvement. Many of these households rent rather than own, missing out on housing gains entirely. Moreover, the share of households with negative net worth has remained stubbornly high, driven particularly by student loan debt among younger, educated households.
Income inequality continues its rise
Unlike wealth, income and earnings inequality have continued their decades-long upward trend. The income Gini rose from 0.60 in 2016, to 0.61 in 2022, while earnings inequality remained at a high, with a Gini of 0.68. This divergence between wealth and income trends breaks a pattern that had persisted since 1989.
The continued rise in income inequality reflects several factors: growing wage differentials by education and occupation, increased earnings volatility, and the concentration of capital income among high-wealth households. While middle-class households gained wealth through housing appreciation, their income growth has not kept pace with those at the top of the distribution.
Additional dimensions of stratification
Our comprehensive analysis reveals several other important patterns.
Family structure: Single-parent households face severe economic disadvantages, with median wealth less than half that of married couples with children, even after adjusting for household size. These disparities persist across all parts of the distribution.
Occupational differences: Substantial wealth disparities exist across industries and occupations beyond what can be explained by education or age. Households in agriculture, for instance, hold exceptional wealth relative to their incomes, while public sector workers show the opposite pattern.
Savings motives: Self-reported savings motives vary systematically across the distribution. While ‘emergencies’ dominates as a concern across all wealth levels, ‘retirement’ saving rises sharply with wealth – mentioned by only 20% of bottom-half households but over 50% of top-decile households. Unlike ‘emergencies’, ‘retirement’ as a savings motive shows a clear life-cycle pattern, with 20% of households mentioning it at the beginning of working lives while more than 50% mention it in the middle of the life cycle.
Policy implications
These findings suggest several important considerations for policy.
First, while the modest decline in wealth concentration is encouraging, it resulted from asset price movements rather than changes in savings behaviour or income distribution. This makes the improvement potentially fragile and quickly reversible.
Second, the failure of bottom-half households to benefit from recent asset price gains highlights the importance of wealth-building policies that extend beyond homeownership. With many households priced out of housing markets or burdened by student debt, alternative paths to asset accumulation deserve attention.
Third, the growing generational wealth gap suggests that younger cohorts face structural disadvantages in wealth accumulation that income-focused policies alone cannot address. Understanding and addressing these barriers will be crucial for long-term economic mobility.
The 2022 SCF data remind us that inequality has multiple dimensions that can move in different directions. While recent housing market dynamics have provided some relief to middle-class wealth positions, fundamental challenges remain in creating broadly shared economic security.
Source : VOXeu
