Financial risk-taking emerges in middle classes as a response to top-end inequality.

Evidence

Households have had more access to new forms of assets and debts and new ways to fund their lifestyles. This occurred at the same time that income inequality and job insecurity increased dramatically in the USA. We show that a more risk-taking culture that engages in more active financial management emerges amongst the middle and upper middle classes. We suggest that these households are feeling the effects of growing inequality at the top more acutely and they respond by changing how they think about their financial lives. For those lower on the socio-economic status distribution, financial strategies are more of a defensive strategy to get by. Those at the top embrace finance as an opportunity to preserve and extend their lifestyles. — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 3

Categorization

• XREF: Connects to the reader’s financialization-of-everyday-life reading thread; the class-stratified response to rising top inequality parallels earlier work on households absorbing economic risk. — connects to: Financialized risk-taking is concentrated in the upper middle class, not spread across all earners — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 143; Upper-middle-class risk-taking is a defensive response to falling behind the top 2% — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 145; Acceptance of debt and risk differs sharply by socioeconomic class — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 120 (+5 more)

Related

• Financialized risk-taking is concentrated in the upper middle class, not spread across all earners (similarity 0.94)
• Upper-middle-class risk-taking is a defensive response to falling behind the top 2% (similarity 0.92)
• The finance culture took root in the upper-middle class. (similarity 0.92)
• Acceptance of debt and risk differs sharply by socioeconomic class (similarity 0.91)
• Financialization of households is stratified by class, not uniform (similarity 0.89)
• Top-end wealth concentration intensifies pressure on lower households to maintain relative lifestyles. (similarity 0.87)
• Upper-middle households increasingly treated homes as leverage assets. (similarity 0.84)
• Households signal financialization through risk-taking, relaxed debt attitudes, and speculative strategies (similarity 0.83)
• Most US households stayed averse to financial risk even during the 1990s boom (similarity 0.80)
• Households are pushed into financial markets that promise lifestyle advancement. (similarity 0.80)
• Neil Fligstein & Adam Goldstein — The Emergence of a Finance Culture in American Households, 1989-2007 (similarity 0.80)
• Finance culture is a cultural frame, not an exogenous shift imposed on households. (similarity 0.79)
• Households borrowed heavily to preserve their lifestyles amid economic insecurity. (similarity 0.79)
• Sub-prime borrowers were largely middle-class people refinancing survival costs, not stereotypical poor fraudsters. (similarity 0.78)

Broader Connections

• Upper-middle-class risk-taking is a defensive response to falling behind the top 2% #expands (0.95) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 145
• Financialized risk-taking is concentrated in the upper middle class, not spread across all earners #expands (0.92) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 143
• Financialization of households is stratified by class, not uniform #expands (0.90) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 21
• The finance culture took root in the upper-middle class. #corroborates (0.88) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 65
• Acceptance of debt and risk differs sharply by socioeconomic class #expands (0.85) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 120
• Top-end wealth concentration intensifies pressure on lower households to maintain relative lifestyles. #qualifies (0.80) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 40
• The rising middle class could not afford the elite’s strategy of spatial self-segregation #exemplifies (0.78)