a higher demand for workers, a rise in labor income, and better opportunities for occupational mobility—an economic environment that, unsurprisingly, led many sociologists to focus on the study of human capital and on the labor market. Another, more pragmatic explanation for the absence of studies on wealth was the scarcity of wealth data during much of the twentieth century, which was marked by an increased reliance on empirical social research. With a few notable exceptions, most industrial and post-industrial societies (including many wealthy OECD countries) only started gathering detailed national-level data on asset ownership and wealth in the late twentieth century.
There is also a theoretical–ideological explanation for the lacuna in wealth studies. The sociological theories that dominated the twentieth-century literature placed a greater emphasis on individual merit, education, and occupational attainment as key determinants of socioeconomic status and mobility. The prevalence of structural functionalism and of the status attainment paradigm, particularly in the US, contributed to this development (see Chapter 4). Within this framework, stratification processes in modern societies are no longer governed by a family’s economic resources and inheritance but are instead based on individual talent and merit. Household wealth and its transmission were seen as features of premodern societies and did not hold up well in this narrative.
After decades in which the sociological study of wealth was absent, an uptick in interest in asset ownership and wealth occurred in the 1980s. This development was a direct response to the increasing diffusion of wealth in the population and to the realization that the emphasis on education and labor market attainment as the main determinants of class, status, and power provided an important but lopsided and incomplete picture of social stratification processes.
With some notable exceptions, the most distinctive feature of the “new sociology of wealth” is that, unlike most of the early social theories, it is almost exclusively empirical and quantitative in nature. This scholarship draws on survey data collected from large samples of households (often representative samples of the total population) and uses models that attempt to establish causation. A key objective of such studies is to identify the specific household-level demographic and socioeconomic variables that determine wealth accumulation and composition and that explain disparities in asset ownership and net worth. The literature also moves beyond the former emphasis on economic explanations to a more comprehensive examination of the interaction between class and various sociodemographic characteristics in wealth mobility and stratification (Oliver and Shapiro 2006; Conley 1999; Chang 2010; Hao 2004).
The scholarly interest in wealth occurred in two stages. The first stage, which was initiated in response to the advent of a propertied middle class after World War II, mainly focused on the trajectories of and disparities in homeownership and, to a lesser extent, the value of housing (Henretta 1984; Jackman and Jackman 1980; Saunders 1978, 1984; Hamnett 1999). The second stage began in the 1990s, when research was directed at household net worth. This reorientation was triggered by noticeable changes in the composition and distribution of household net worth after the mid-1980s. Economic liberalism, globalization, deindustrialization, and financialization—in addition to major demographic trends such as the aging of the population and the impending retirement of the baby-boomer generation (European Commission 2015)—resulted in growing disparities in household net worth. The rising inequality and the changing terrain of wealth stirred growing interest and concern among social scientists and policy makers, while the availability of more detailed and reliable data from national surveys allowed for a more rigorous investigation of these emerging trends. In the US, national surveys include the Panel Study of Income Dynamics (PSID) and the Survey of Consumer Finances (SCF), which collect information on the ownership, composition, and net worth of the assets owned by households. They also capture valuable information on parental resources, as well as on the timing and amount of financial bequests transferred to and received by participants. Other surveys, such as the Health and Retirement Study (HRS) in the US and the Survey of Health, Ageing, and Retirement in Europe (SHARE), target middle-aged and older adults.
New and changing wealth patterns since the late twentieth century have necessitated innovative, often interdisciplinary approaches to the study of wealth mobility (Jianakoplos and Menchik 1997; Gale and Scholz 1994; Keister 2005; Semyonov and Lewin-Epstein 2013) and inequality (Wolff 1996, 2017; Piketty 2014). Some studies have focused on the concentration of wealth among the so-called one percent (Keister 2014), while others have proposed policies designed to enhance the creation of wealth among the asset-poor (Sherraden 2005; Shapiro and Wolff 2001; Blank and Barr 2009). Inequalities in asset ownership and net worth along social and demographic lines—in particular race, ethnicity, immigration status (Oliver and Shapiro 2006; Hao 2007; Campbell and Kaufman 2006; Akresh 2011), gender (Chang 2010; Ruel and Hauser 2013; Edlund and Kopczuk 2009), marital history (Wilmoth and Koso 2002), and religion (Keister 2011)—have also received increased attention from sociologists, economists, and social demographers. Meanwhile another line of research has emerged in economic sociology that has provided valuable insight into the changing nature of private property, markets, and financial institutions (Carruthers and Kim 2011; Davis 2009; Krippner 2005).
Conceptualizing wealth: A rudimentary model of wealth accumulation
One of the key questions in the scholarship on wealth centers on the extent to which members of society are able to move up the economic ladder and improve their relative and absolute socioeconomic standings. In contrast to the prevailing emphasis on individual mobility in the labor market, wealth attainment is best understood in the context of the changing relationships between labor income, consumption, and savings over the life course.
Modigliani and Brumberg’s (1954) influential life-cycle hypothesis (LCH) is based on the premise that people tend to save out of their income during their working lives and employ dissaving after retirement. According to this theory, the life-cycle process of wealth accumulation starts with low levels of wealth, which are attributed to volatile income and low savings among young adults. These levels usually increase during the years of participation in the labor force and reach a peak in the pre-retirement years, before stabilizing and then falling in the post-retirement years. Empirical research has generally supported this curvilinear, hump-shaped pattern of savings by age profile, although some scholars have questioned the timing and magnitude of deaccumulation by arguing that older adults continue to maintain a standard of living that is comparable to that of their pre-retirement years (Kotlikoff and Summers 1989; De Nardi et al. 2016; Angelini et al. 2013).
While the LCH is useful as a model of wealth attainment, the social, economic, and demographic trends observed in many countries since the mid-twentieth century (e.g. increasing life expectancy, declining fertility, and shifting family structures and marriage patterns), along with structural changes in the labor and financial markets, present several challenges to the theory. Two critiques in particular merit attention. They center on financial transactions that take place in the two main social institutions that support wealth accumulation—the family and the market. The first focuses on the changing nature of intra- and intergenerational family transfers, while the second focuses on new forms of economic transactions in multiple markets.
Families: Intra- and intergenerational transactions
In wealth research, wealth mobility reflects the life trajectories of families, not solely individuals. This focus on the family as the unit of analysis disrupts and complicates the direct link, previously maintained, between individual effort in the labor market and wealth holdings (Allen and Hamnett 1991; Sorensen 1994). Hao (2007) proposes that, in order to better understand wealth accumulation processes in increasingly diverse industrialized societies, one should study the life-course trajectories of the family (e.g. cohabitation and marriage, the decision to have children, divorce, and remarriage) rather than solely those of the individual.
Empirical studies offer considerable evidence in support of this approach, revealing how critical union formation, marital history, and economies
