Avoiding material hardship: The buffer function of wealth

We assess how a variety of disruptive life-course events impact the economic wellbeing US households and trace importance household wealth in helping families who experience these avoid entering spell material hardship. Using longitudinal data from two panels Survey Income Program Participation (SIPP), we draw on direct measures hardship, assets. Our analyses reveal that relationship between likelihood experiencing new hardship strongly varies across distribution, suggesting high provides an effective private safety net. By distinguishing different types events, demonstrate divorce, disability income loss entail risk but also this is effectively buffered by substantial wealth. Different – namely, financial, food medical respond similar ways. Like public insurance schemes, helps buffer effects unlike reliance further stratifies households. Policy options for addressing highly stratified scheme include disposing need it funding more robust insurance, instance through taxation.