Understanding U.S. Income and Wealth Inequality After the 2022 Survey of Consumer Finances

The 2022 wave of the Survey of Consumer Finances (SCF), conducted by the Federal Reserve Board, offers one of the most comprehensive post-pandemic snapshots of the financial lives of U.S. households. Researchers Moritz Kuhn of the University of Mannheim, CEPR, and IZA, and José-Víctor Ríos-Rull of the University of Pennsylvania, NBER, CEPR, and CAERP present an expanded analysis of the data, extending a long tradition of SCF-based inequality documentation. Their work provides timely insights into how household earnings, income sources, wealth, demographics, and occupational patterns shape the evolving landscape of economic inequality in the United States.

Post-Pandemic Financial Dynamics: A New Baseline

The period leading up to the 2022 SCF was marked by unusual macroeconomic turbulence. Rapid swings in asset prices, shifts in labor-market participation, and changes in saving behavior created new financial realities for households. For policymakers, investors, and economic observers, the updated SCF serves as a crucial benchmark for understanding both short- and long-run distributional trends.

The findings reinforce the central observation of U.S. inequality research: while income inequality remains substantial and has continued to grow, wealth inequality is even more pronounced though showing signs of modest decline from its 2016 peak due in part to broad-based gains in housing wealth.

Life-Cycle Patterns: How Age Shapes Economic Outcomes

The SCF data underscore a consistent life-cycle pattern in earnings, income, and wealth. Households under age 25 begin with relatively low economic resources earnings and income starting around half the life-cycle average and then steadily climb to a peak between ages 51 and 55. Earnings at this stage reach roughly 150 percent of the life-cycle average, representing nearly a tripling of financial capacity between early adulthood and mid-career.

Wealth, by contrast, rises almost continuously with age. Young households start with limited assets but high human-capital potential. Over time, savings, investment accumulation, and business ownership contribute to increased wealth, generating rising capital income. After age 60, income composition changes sharply as transfer income grows in importance while labor income declines due to reduced participation and retirement transitions.

Within-Group Inequality: Age Is Not a Great Equalizer

While between-age differences are substantial, inequality also expands within age cohorts. Gini coefficients for earnings and income rise steadily with age, implying widening dispersion in outcomes as households progress through the life cycle. Wealth inequality, however, stays consistently high across all age groups, with Gini coefficients exceeding 0.75. Elderly households show particularly high levels of wealth concentration, suggesting a combination of accumulated differences in savings, investment behavior, and inheritances.

Demographic shifts including the aging of the Baby Boom generation and fluctuating household sizes tied to family formation further amplify these dynamics. These demographic effects underscore the importance of considering household composition when interpreting inequality measures.

Marital Status as a Key Determinant of Economic Well-Being

Marital status emerges as one of the strongest predictors of household financial outcomes. Married households possess roughly three times the earnings, income, and wealth of single households a gap far exceeding differences in population share or household size. This advantage persists across nearly all measures of economic well-being.

Singles with dependents represent one of the most financially fragile groups. Though their household sizes often mirror those of married couples, they hold far fewer resources and rely heavily on transfer income, which accounts for 20 percent of their total income twice the share observed for married households. Among retired widows, transfer income makes up nearly 70 percent of income, yet their accumulated wealth is relatively substantial, exceeding the average wealth of single households by 60 percent.

Gender disparities also feature prominently. Among singles without dependents, male-headed households possess around 50 percent more income and wealth than female-headed households. Differences in income sources further highlight divergent economic paths: single men derive nearly one-third of income from capital, whereas single women rely more on transfers, reflecting differences in longevity, career trajectories, and widowhood patterns.

Employment Status: A Powerful Stratifier of Earnings and Wealth

Employment status workers, self-employed, retired, non-workers, and disabled household heads creates pronounced financial stratification. Workers and the self-employed report the highest earnings. The self-employed especially stand out, with average income nearly double that of workers and wealth exceeding that of workers by more than fivefold. Yet this group also shows high within-group inequality, reflecting both entrepreneurial success stories and financial volatility.

Retired households, while earning far less than workers, achieve nearly 80 percent of workers’ income once transfers and capital income are included mirroring years of asset accumulation. Disabled and non-working households face the steepest challenges, with disabled households earning only about 10 percent of the sample mean and non-workers exhibiting some of the highest inequality levels.

Income composition mirrors employment characteristics: workers depend overwhelmingly on labor income, the self-employed on business income, and retirees and disabled households on transfers. Surprisingly, non-workers still receive most of their income from labor sources, likely due to working spouses.

Occupational and Industry Effects: Beyond Employment Status

The SCF also provides insights into how occupational and industry classifications shape financial outcomes. By controlling for age, education, and marital status, the authors identify clear occupation-specific and industry-specific differences in both income and wealth. While the study does not list the specific coefficients in the provided text, it notes that these differences remain substantial even after regression adjustments suggesting that the nature of work itself, not just demographic characteristics, plays a significant role in shaping long-term financial trajectories.

A Multi-Dimensional View of Inequality

The updated SCF confirms the enduring concentration of wealth in the United States, with the top 1 percent holding more than one-third of total wealth. While wealth inequality has moderated slightly from its recent peak because of widespread home-equity gains, earnings and income inequality have continued to rise. The data reveal persistent gaps linked to age, marital structure, employment status, and occupation, along with emerging generational disparities in wealth building.

These findings highlight that inequality is not one-dimensional but deeply intertwined with demographic and economic structures. For investors, economists, and policymakers, the SCF continues to serve as an essential guide to understanding how different groups navigate the U.S. economic landscape and how financial outcomes evolve across the life cycle.