Roughly one-third of American households — 38 million — are living without a financial cushion, and many of them are considered wealthy, according to a study by university economists.
The study, "The Wealthy Hand-to-Mouth," by economists Greg Kaplan and Justin Weidner of Princeton University and Giovanni Violante of New York University, found that the country's poor households are not alone in their lack of liquid assets.
The paper showed that the wealthy living this way actually outnumber the poor, accounting for a staggering two-thirds of the total hand-to-mouth households in the U.S.
Recommended For You
The so-called wealthy hand-to-mouth may own an average of at least $50,000 in assets such as homes, cars and retirement accounts but they cannot easily access them.
They are likely to be older, better educated and have higher incomes than the poor hand-to-mouth households, according to the paper.
It also found that the wealthy hand-to-mouth households in the U.S. don't stay that way for very long, lasting about 2.5 years each. The study concluded that these households either move up to wealthy status without living hand-to-mouth or they fall behind and land in poor hand-to-mouth status.
Wealthy hand-to-mouth households "are important because they tend to have a large consumption response to transitory income shocks, which is a key determinant of the efficacy of many types of fiscal interventions, such as the fiscal stimulus payments that were used in the last two recent recessions," said the authors.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
