Working Paper

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.

Keywords: Wealth concentration; Household wealth;

JEL Classification: D31; D14; H00; E6;

https://doi.org/10.17016/FEDS.2018.024

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Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: Finance and Economics Discussion Series

Publication Date: 2018-04-13

Number: 2018-024