"It’s not just the poor who live paycheck to paycheck.
A study from Greg Kaplan and Justin Weidner of Princeton University and Giovanni Violante of New York University
finds that two-thirds of the 38 million American households who consume
all their disposable income every pay period aren’t poor.
The study, released at a Brookings Institution event, found that
these so-called wealthy-hand-to-mouth are older than their poor
paycheck-to-paycheck counterparts, have higher incomes (about $50,000)
and hold substantial illiquid assets (also around $50,000 on average),
like real estate. The poor who live paycheck to paycheck have median
incomes around $20,000.
However, these people only tend to stay in this situation for about
2.5 years, unlike the poor who tend to stay for long periods of time.
It’s not just a U.S. phenomenon: Canada, Australia, the U.K.,
Germany, France, Italy and Spain also have more non-poor
paycheck-to-paycheck households than poor ones, though the percentage
varies across countries.
The authors say the findings are important for policymakers when they craft stimulus programs.
The other finding that may be startling is that a third of all households do live paycheck to paycheck."
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