Journal of Family and Economic Issues

, Volume 35, Issue 2, pp 131–144

Is Household Wealth Sustainable? An Examination of Asset Poverty Reentry After an Exit

Original Paper

DOI: 10.1007/s10834-013-9357-0

Cite this article as:
Leonard, T. & Di, W. J Fam Econ Iss (2014) 35: 131. doi:10.1007/s10834-013-9357-0

Abstract

This paper analyzed the influence of financial behaviors on the duration out of asset poverty while controlling for households’ life cycle and demographic characteristics. We found evidence for the existence of structural barriers to asset acquisition. Asset accumulation at or above levels equal to nine-months worth of income at the income-poverty level was important for improving a household’s odds of permanently escaping asset poverty, but a linear relationship between asset accumulation and the likelihood of returning to asset poverty did not emerge. Moreover, minimizing debt and diversifying the asset portfolio to include more productive assets were positively related to maintaining assets; but households should also consider the risks associated with portfolio allocations.

Keywords

AssetPovertyWealth

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Economics DepartmentUniversity of Texas at DallasRichardsonUSA
  2. 2.Community Development DepartmentFederal Reserve Bank of DallasDallasUSA