With housing costs rising in much of the country and earnings remaining stagnant, baby-boomers are facing the possibility that their children may not reach the standard of living they have enjoyed. However, Seymour Spilerman, sociology professor at Columbia University, contends that typical measurements of wealth offer an incomplete picture of Americans' economic status, possibly creating an inaccurate forecast of future generations' living standards.

"Traditionally, sociological studies of economic stratification have focused on issues of income, occupational standing, how education produces income flow and how income is a measurement of living standards," said Spilerman. "But this doesn't account for how wealth is transferred across generations and how household assets affect one's standard of living.

"You can enjoy wealth so that it becomes part of your standard of living, such as having a home in the Hamptons or owning a fine painting," he continued. "This is not a consumption of assets but it's a major component of a living standard. It provides individuals with a certain protection that human capital does not. If you lose your job, your income level stops, but the capital gains from your assets continue. In addition, these assets are often passed from parents to their children, which perpetuates economic inequality across generations."

Spilerman considers household wealth and intergenerational transfer of assets in a study supported by a grant from the Ford Foundation. The two-year analysis, "Determinants of Living Standards and Economic Well-Being," will be conducted concurrently with two additional studies: "Asset Formation and Living Standards in France, Germany and the United States" and "Living Standards and Economic Well-Being in Chile." The comparative studies, also funded by Ford Foundation grants, will be conducted with colleagues in these countries.

"The research will not only look at the importance of assets in the United States," said Spilerman, "it will also allow us to gain some comparative insight as to the importance of assets under different social structures in other countries. We can then have a better idea of how assets interact with other elements of social structures and be more aware of the consequences of policies."

In the United States, these policies include the estate tax--which will be gradually phased out by 2010 and fully restored in 2011--and welfare programs. Spilerman said the impact of the United States' welfare policies on the production of wealth is clear.

"The welfare structure in the United States by and large penalizes people for accumulating assets," said Spilerman. "There is an asset limitation: you have to leave welfare if you reach a certain level of assets. This means we are undercutting any entrepreneurial instincts and desires to raise oneself out of poverty."

However, he is less certain how the eventual, though temporary, elimination of the estate tax will affect the accumulation of wealth.

"Wealthy individuals have a variety of goals besides assisting their children, such as making contributions to charity," said Spilerman. "It is not clear how the elimination of the estate tax will affect giving to charities. Most likely, the people who are very wealthy will continue their current plans for their assets and may have never intended to give all of their assets to their children anyway."

Regardless of the impact of household assets and the inter-generational transfer of wealth, Spilerman said it is clear economic inequality is increasing in the United States. A June survey by the Pew Research Center for the People and the Press shows that an increasing proportion of Americans share this view.

"It is very clear that since the very late 1970s inequality has increased in the U.S.," said Spilerman. "It has increased considerably and irrespective of how you measure it. We as a people have to give some thought about how concerned we are about this.

"There is a lot we can learn from other countries, especially Latin American countries where there has traditionally been high inequality, much higher than in the United States," he continued. "High inequality and increasing inequality has led, in my opinion, to a lack of community identity by all members of the society. The wealthy cannot conceive of being in the position of the poor and the poor cannot conceive that either they or their children might ever be in the category of the wealthy. In such a circumstance, you have very little solidarity, which is needed to build society with feelings of responsibility toward the community."

Spilerman said the issue of inequality should encourage Americans to consider how growing disparities in economic well-being affect the nation as a whole.

"We should keep in mind the consequences of extreme inequality in a society or what can be the consequences," he said. "And we should have a discussion of how much inequality we feel is desirable in America and how much America can tolerate."