Angelina Grigoryeva, University of Toronto
In the course of financialization of the U.S. economy, American households became increasingly involved in financial activities. Using the Survey of Consumer Finances data and latent class analysis, this study shows that contrary to the prevailing assumption, household financialization did not follow a single continuous trajectory. Rather, it developed through several categorically different trajectories that represent distinct configurations of its multiple dimensions encompassing investing, borrowing, new finance culture, and financial management. Over time, the identified structure of household financialization displays increasing divergence in the prevalence of different trajectories rather than converging to a single one. This heterogeneity reveals the role of household financialization in growing wealth inequality, even after accounting for standard socio-demographic explanations. The trajectories of household financialization associated over time with greater wealth are increasingly more prevalent among the already socio-economically privileged, whereas those associated with wealth depletion – among the less advantaged. Thus, financialization entails both a major historic shift in household economic activity and a new system of social stratification.
No extended abstract or paper available
Presented in Session 183. Inequality, Wealth and Poverty