Income inequality has increased sharply since the 1980s yet surveys show modest increase in wealth concentration
One possible explanation: rising inequality is a pure labor income phenomenon
– Rise in top incomes due to top wage earners/entrepreneurs only – The working rich may not have had enough time to accumulate
– Or they may have low saving rates, face very high tax rates, give a lot to charities, have low returns on their assets … preventing them from accumulating large fortunes
Is this view well-founded? Our answer is “No”
Based on new estimates of wealth and capital income distributions, we find:
– Large increase in top 0.1% wealth share since 1980s (top 0.1% = wealth above $20 million today)
– Even larger proportional increase for top 0.01% (top 0.01% = wealth above $100 million today)
– Rising top capital income shares – No increase below the top 0.1%
At very top, US back to early 20th century wealth concentration levels
Chosen excerpts by Job Market Monitor. Read the whole story at The Distribution of US Wealth, Capital Income and Returns since 1913
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