How Much has Wealth Concentration Grown in the United States? A Re-Examination of Data from 2001-2013
Abstract: Well known research based on capitalized income tax data shows robust growth in wealth concentration in the late 2000s. We show that these robust growth estimates rely on an assumption---homogeneous rates of return across the wealth distribution---that is not supported by data. When the capitalization model incorporates heterogeneous rates of return (on just interest-bearing assets), wealth concentration estimates in 2011 fall from 40.5% to 33.9%. These estimates are consistent in levels and trend with other micro wealth data and show that wealth concentration increases until the Great Recession, then declines before increasing again.
File(s): File format is application/pdf https://www.federalreserve.gov/econres/feds/files/2018024pap.pdf
Part of Series: Finance and Economics Discussion Series
Publication Date: 2018-04-13