One line of criticism asserts that, while income is indeed weakly correlated with life satisfaction, wealth is a more robust indicator of living standards and economic security. Because asset ownership tends to lower financial worries and to elevate financial satisfaction, it has a strong effect on mental health status, measured both in well-being (happiness and satisfaction) and in ill-being (anxiety, depression, and distress) (Headey and Wooden 2004; Headey et al. 2008; see review in Zavisca and Gerber 2016).
The unique role of wealth in QOL outcomes has also emerged in research aimed at explaining the satisfaction paradox—namely, the fairly high levels of financial satisfaction among older adults, in spite of their low levels of reported income. Here, too, the paradox is partly explained by the relatively high levels of accumulated wealth and low levels of debt that older people have (Hansen et al. 2008; Headey and Wooden 2004; Hochman and Skopek 2013). Another explanation for the impact of asset ownership on well-being centers on changes in owners’ cognitive reality: the durability of their assets broadens their opportunity structures and allows for greater autonomy, prediction, and control over their future (Sherraden 1991; CFED 2013; Yamada and Sherraden 1996).
Not surprisingly, the association between wealth holdings and subjective well-being also takes the form of unfavorable psychological outcomes generated by substantial loss of property and wealth (Shiller 2008). While acknowledging the challenge of establishing causality, Tsai’s (2015) meta-analysis cites numerous studies that identify the adverse effects of home foreclosure on mental health.
Health and life expectancy
In a thorough review of the literature on the role of socioeconomic status differences in shaping disparities in health outcomes and mortality, Elo (2009: 553–572) found consistent evidence that health status and mortality vary according to socioeconomic status, although with the caveat that the actual mechanisms behind this relationship are less clearly understood (Attanasio and Hoynes 2000). Explanations for the wealth–health nexus focus on the cost of healthcare services and on people’s ability to afford or access a healthy lifestyle, which includes the availability of healthy food (often scarce in “food deserts”) and the degree of access to green spaces, adequate housing, and good air quality (Woolf et al. 2015; Adams et al. 2003). Research suggests that the effects of asset holding on health outcomes are mediated by demographic and socioeconomic characteristics. According to Pollack et al. (2013: 439–445), wealth has a significant effect on the health status reported within racial and ethnic groups, even after accounting for education and income.
Other studies, however, have shown weaker support for the role of wealth on health outcomes. Studying the effect of socioeconomic status on health across the life course in the US, for example, Smith (2007) concluded that socioeconomic status does affect future health outcomes, but the principal reason for this trend is education rather than income or wealth. It is likely that the effects of assets and wealth on health status vary across the life course, but establishing direct causal relationships between the two variables remains a challenging task (Adams et al. 2003; Gibson et al. 2011; Lerman and McKernan 2008).
Marital status and family life
Wealth plays a part in some of the most important decisions that couples make, including marriage entry and timing, and also contributes to child well-being and life chances. Both qualitative and quantitative studies in the US have found that couples consider assets and accumulated wealth in the form of savings, homeownership, or car ownership as essential prerequisites to marriage (Schneider 2011; Edin and Kefalas 2005; Smock et al. 2005).
Edin and Reed (2005: 117–137) find support for the financial expectations and family formation theory, suggesting that, in addition to employment and earnings, contemporary marital expectations have expanded to include the prospect of financial security through asset ownership and net worth (Gibson-Davis 2009). A participant in Edin and Kefalas’s (2005) study expressed precisely these sentiments, emphasizing her need for economic security as a prerequisite to marriage:
I’m not gonna just get into marrying him and not have my own house! not have a job! … If we got a divorce, that would be my house. I bought that house, he can’t kick me out or he can’t take my kids from me … I know a lot of people that happened to. I don’t want it to happen to me. (Quoted in Edin and Kefalas 2005: 471)
Schneider’s (2011) quantitative research supports the finding that accumulated wealth is a strong predictor of entry into marriage, concluding that the total value or net worth of the tangible and financial assets owned by a couple is a strong predictor of the decision to get married. A recent study found that, for Americans over the age of 60, being wealthy reduces the likelihood of separation among married couples and increases the likelihood of men’s transition to marriage among cohabiting couples (Vespa 2013).
The positive effect of a family’s wealth and asset ownership on child well-being has been broadly ascertained. Even when various demographic and socioeconomic characteristics have been controlled for, parental wealth status is important for such outcomes as high school graduation, college attendance, and teenage pregnancy (see Grinstein-Weiss et al. 2014). A study on secondary school students in Italy showed that parental homeownership and debt (mortgages) had positive and negative effects, respectively, on students’ reported levels of life satisfaction (Becchetti and Pisani 2014).
Children’s educational attainment—often viewed as a form of cultural capital on account of the social status associated with it and of the technical competence and skills (human capital) it entails (see Lareau and Weininger 2003)—has been consistently linked to parental wealth. Parents with a sufficient amount of wealth adopt various strategies to improve the life chances of their children. In the US, where property taxes are used to finance local public schools, parental wealth influences children’s schooling both directly, through payments for tutors and enrichment programs, and indirectly, through the association between the price of real estate in a given area and the amount of local property taxes available to fund local schools. Consequently household wealth emerges as a critical factor in determining the neighborhoods in which the parents of school-age children reside and, accordingly, the quality of the public education their children receive. Johnson (2006) coined the term “wealth privilege” to describe this intergenerational transmission of advantages, from economic capital to cultural and human capital. For young adults, parental wealth continues to be a formative factor in educational attainment, shaping access to post-secondary education, particularly the transition from high school to college (Conley 2001), occupational attainment, and asset ownership (Henretta 1984; Blanchflower and Oswald 1998; Holtz-Eakin et al. 1994; Spilerman 2004).
Why do we know so little about wealth?
The twentieth-century lacuna and the “new” sociology of wealth
Since private wealth and property constitute such a significant piece of the complex jigsaw puzzle that is people’s economic, social, and psychological well-being, it seems surprising that these topics were generally ignored in social research for most of the twentieth century. The reasons for this lacuna in social research on wealth—and, conversely, for the upsurge of a new sociology of wealth since the late 1980s—can be divided into two supplemental categories: empirical–pragmatic and theoretical–ideological.
The empirical justification for the absence of wealth analysis involved the relative lack of property ownership in the general population. In the early twentieth century, in both Western Europe and the US, the bottom 90% of the population was estimated to own only 10% of the total wealth (Piketty 2014). Not surprisingly, the research conducted on wealth ownership during that period consisted of a small number of studies that focused on the upper class and the elite (Mills 1956; Domhoff 2002). The period after the economic shocks of the two world wars was characterized by relative wealth equality and wealth gains among middle-class households. These changes coincided with a visible
