The wealthy hand-to-mouth

Greg Kaplan, Giovanni L. Violante, Justin Weidner

Research output: Contribution to journalArticlepeer-review

132 Scopus citations


The “wealthy hand-to-mouth” are households that hold little or no liquid wealth, whether in cash or in checking or savings accounts, despite owning sizable amounts of illiquid assets (assets that carry a transaction cost, such as housing or retirement accounts). We use survey data on household portfolios for the United States, Canada, Australia, the United Kingdom, Germany, France, Italy, and Spain to document the share of such households across countries, their demographic characteristics, the composition of their balance sheets, and the persistence of hand-to-mouth status over their life cycle. The portfolio configuration of the wealthy hand-to-mouth suggests that these households may have a high marginal propensity to consume out of transitory income changes, a prediction for which we find empirical support in PSID data. We explain the implications of this group of consumers for macroeconomic modeling and fiscal policy analysis.

Original languageEnglish (US)
Pages (from-to)77-138
Number of pages62
JournalBrookings Papers on Economic Activity
VolumeSpring 2014
StatePublished - Mar 1 2014
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • General Business, Management and Accounting
  • Economics and Econometrics


Dive into the research topics of 'The wealthy hand-to-mouth'. Together they form a unique fingerprint.

Cite this