Search Results
Journal Article
Where Do the Wealthiest Get Their Wealth?
An analysis using data from Norway identifies the top 0.1% of wealth accumulators and then traces how their wealth evolved from their 20s to their 50s.
Working Paper
Preventive vs. Curative Medicine: A Macroeconomic Analysis of Health Care over the Life Cycle
This paper studies differences in health care usage and health outcomes between low- and high-income individuals. Using data from the Medical Expenditure Panel Survey (MEPS) I find that early in life the rich spend significantly more on health care, whereas from midway through life until very old age the medical spending of the poor dramatically exceeds that of the rich. In addition, low-income individuals are less likely to incur any medical expenditures in a given year, yet, when they do incur medical expenditures, the amounts are more likely to be extreme. To account for these facts, I ...
Working Paper
Mortgage Market Structure and the Transmission of Monetary Policy During the Great Inflation
This paper examines the impact of mortgage market structures on shaping economic responses to the unprecedented interest rate and inflation dynamics of 2021-2024. We first empirically document that economies with a larger share of variable-rate mortgages exhibit stronger responses in house prices to monetary policy shocks. We then develop and calibrate a structural model of the housing market to demonstrate that these mortgage structures can account for a substantial portion of the divergent house price paths observed across the U.S., Canada, Sweden, and the U.K. during the Great Inflation. ...
Working Paper
What Do Data on Millions of U.S. Workers Reveal about Life-Cycle Earnings Risk?
We study the evolution of individual labor earnings over the life cycle using a large panel data set of earnings histories drawn from U.S. administrative records. Using fully nonparametric methods, our analysis reaches two broad conclusions. First, earnings shocks display substantial deviations from lognormality?the standard assumption in the incomplete markets literature. In particular, earnings shocks display strong negative skewness and extremely high kurtosis?as high as 30 compared with 3 for a Gaussian distribution. The high kurtosis implies that in a given year, most individuals ...
Working Paper
Why Are the Wealthiest So Wealthy? New Longitudinal Empirical Evidence and Implications for Theories of Wealth Inequality
CORRECT ORDER OF AUTHORS: Hubmer, Halvorsen, Salgado, Ozkan. We study the lifecycle dynamics of wealth inequality using 1993-2019 Norwegian administrative panel data on wealth and income. Employing a novel budget-constraint approach, we decompose the excess wealth of the top 0.1% households relative to the median between ages 45 and 64 into higher saving rates (36%), inheritances (31%), returns (28%), and labor income (5%). One quarter of the wealthiest—the “New Money”—start with negative wealth on average but accumulate rapidly through high labor income and exceptionally high saving ...
Working Paper
Scalable versus Productive Technologies
CORRECT ORDER OF AUTHORS: Hubmer, Chan, Ozkan, Salgado, Hong. Are larger firms more productive, more scalable, or both? We use firm-level panel data from thirteen countries and employ a broad set of methods to estimate factor elasticities—capturing returns to scale (RTS)—and total factor productivity (TFP). We find substantial RTS heterogeneity within industries, with larger firms exhibiting higher RTS driven by greater intermediate input elasticities. TFP, by contrast, rises with firm size only up to the top decile before declining. The RTS–size gradient primarily reflects persistent, ...
AI and Productivity: What Firms Are Saying on Earnings Calls
The way firms discuss productivity improvements on earnings calls increasingly involves references to AI, even if its effects aren’t clear in aggregate data.
How Does Immigration Shape Average Labor Productivity? Evidence from the CPS
An analysis suggests changes in workforce composition—particularly foreign-born employment share—have had little effect on U.S. productivity growth since 2023.
Working Paper
Taxation of human capital and wage inequality: a cross-country analysis
Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts, focusing on male workers. We construct a life cycle model in which individuals decide each period whether to go to school, work, or stay non-employed. Individuals can accumulate skills either in school or ...
Report
Taxation of human capital and wage inequality: a cross-country analysis
Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts. We begin by documenting two new empirical facts that link these inequality differences to tax policies. First, we show that countries with more progressive labor income tax schedules have significantly ...