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Are Families Prepared for Financial Emergencies?

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Publication Date: September 2009

Publisher(s): Tax Policy Center

Author(s): Caroline Ratcliffe; Katie Vinopal

Special Collection: John D. and Catherine T. MacArthur Foundation

Topic: Social conditions (Poverty and homelessness)

Keywords: Families/Parenting; Economic Well-being; Economy; Income inequality

Type: Report

Abstract:

Data from the 2007 Survey of Consumer Finances show a disturbing reality. Even prior to the current recession, many families did not have enough assets to see them through a modest spell of unemployment or another financial emergency. In 2007, nearly one in three U.S. families were liquid asset poor. Low-income, young, and nonemployed families are more vulnerable to economic emergencies. For example, two-thirds (68 percent) of bottom income quintile families and 47 percent of second income quintile families are liquid asset poor, while such shortfalls affect only 1 percent of top income quintile families.