Luigi Guiso, Luigi Pistaferri, 14 May 2022

The literature on assortative mating has largely focused on whether children of wealthy parents tend to marry children of similarly wealthy parents. Using data from Norway, this column shows that people tend to match based on their own pre-marriage wealth, not their parent’s wealth, and that individuals also match based on their personal returns to wealth. Among wealthy couples, the partner with the highest pre-marriage return tends to manage the household’s assets, allowing the households to grow their assets even faster over time and boosting wealth concentration. 

Gonzalo Paz-Pardo, 26 January 2022

Homeownership among younger households has been decreasing in several major advanced economies. This column shows that increases in labour income inequality and uncertainty are key drivers of this trend. Confronted with high house prices and low, risky incomes, many young households cannot or do not want to risk making such a big, illiquid investment. As a result, they accumulate less wealth.

Daniel Waldenström, 17 November 2021

Wealth inequality has attracted considerable attention in recent years. This column presents new historical evidence that revises earlier results and reveals long-term patterns. A key finding is that wealth has changed in nature over the past century: once held by the elite, it is now widely held in the form of housing and pension savings. These changes appear to account for the redistribution of wealth over the last century and the fact that its concentration has remained relatively low in more recent decades despite rapid increases in aggregate wealth.

Asger Lau Andersen, Niels Johannesen, Mia Jørgensen, José-Luis Peydró, 19 April 2021

Who gains – and by how much ­– when central banks soften their monetary policy regime is a key policy question. This column discusses new evidence on the distributional effects of monetary policy based on detailed administrative household-level data. The authors show that the gains from lower policy rates exhibit a steep income gradient, with the increases in income, wealth, and consumption modest at the bottom of the income distribution and highest at the top. 

Branko Milanovic, 29 January 2021

In classical capitalism, the rich earn their money from capital while the poor sell the value of their labour. In which countries is that still true, and how does it affect the gap between rich and poor? Branko Milanovic tells Tim Phillips about a new way in which we can think about inequality.

Marco Ranaldi, Branko Milanovic, 03 December 2020

Similar levels of income inequality may coexist with completely different distributions of capital and labor incomes. This column introduces a new measure of compositional inequality, allowing the authors to distinguish between different capitalist societies. The analysis suggests that Latin America and India are rigid ‘class-based’ societies, whereas in most of Western European and North American economies (as well as in Japan and China), the split between capitalists and workers is less sharp and inequality is moderate or low. Nordic countries are ‘class-based’ yet fairly equal. Taiwan and Slovakia are closest to classless and low inequality societies. 

Sander Wagner, Diederik Boertien, Mette Gørtz, 01 November 2020

Couple formation plays an important role in affecting both the extent to which wealth remains concentrated from one generation to the next and in subsequently shaping wealth inequalities. This column uses administrative data from Denmark to study partner selection based on parental wealth. It finds a relatively low correlation in partners' parental wealth overall, but a high degree of homogamy at the top of the parental wealth distribution. In addition, it finds that homogamy based on parental wealth has increased steadily during the period 1980-2013. 

Prottoy A. Akbar, Sijie Li, Allison Shertzer, Randall Walsh, 31 August 2019

The Great Migration is associated with increased residential segregation in northern cities, inflating rents and eroding housing values. This column uses new data at the block level to estimate the scale of price changes. Segregation and ghetto expansion meant that much of the gain in earnings for black families who moved north were cancelled out. The effects of this are still felt today.

Sandra Black, Paul Devereux, Petter Lundborg, Kaveh Majlesi, 16 May 2019

The wealth of parents and that of their children is highly correlated, but little is known about the different roles genetic and environmental factors play in this. This column compares outcomes for adopted children in Sweden and those of their adoptive and biological parents and finds there is a substantial role for environment in the transmission of wealth and a much smaller role for pre-birth factors. And while human capital linkages between parents and children appear to have stronger biological than environmental roots, earnings and income are, if anything, more environmental. 

David Miles, 06 December 2018

Annette Alstadsæter, 03 August 2018

It's routine for the rich to dodge tax by hiding it offshore. But how much of their wealth are they hiding illegally? Tim Phillips talks to Annette Alstadsæter of the Norwegian University of Life Sciences about how she and her colleagues used whistleblower data to discover the extent of tax evasion by the ultra-rich.

Filipa Sá, 15 May 2018

There is growing concern among households and policymakers alike that house prices in England and Wales are being driven up by foreign buyers making investment purchases. Filipa Sá examines the link between foreign investment and house prices, using local authority data over a span of 15 years. This video was recorded at the 2018 RES annual conference.

Annette Alstadsæter, Niels Johannesen, Gabriel Zucman, 09 May 2018

Tax records are often used to gauge the concentration of wealth and income in a society. However, if the rich dodge taxes more than the poor, tax records will underestimate inequality. This column uses Scandinavia as an example to demonstrate how tax evasion varies with wealth: the top 0.01% richest households in Scandinavia evade about 25% of the taxes they owe by concealing assets and investment income abroad. The very rich are able to do this simply because they have access to wealth concealment services. To reduce top-end evasion, what is essential is to shrink the supply of such services.

Thomas Piketty, 10 April 2018

Wealth inequality is a growing problem across advanced and developing countries alike. Though research on inequality is growing, much of it remains reliant on theoretical models. Thomas Piketty discusses the importance of data collection in the study of inequality, on both the academic and policy fronts.

Tony Atkinson, Peter Backus, John Micklewright, 24 March 2018

Many governments seek to encourage charitable giving, both in life and upon death, via favourable treatment in the tax code. This column uses new data from the UK to examine how estate size and the inheritance tax threshold influence the decision to make a bequest to charity. The likelihood of including a bequest in a will rises modestly over the bottom half of the estate size distribution, and more rapidly over the upper tail. The results also suggest that the inheritance tax leads to an increase in charitable intent.

Thomas Piketty, Li Yang, Gabriel Zucman, 20 July 2017

Between 1978 and 2015, China moved being from a poor, underdeveloped country to the world’s leading emerging economy. But relatively little is known about how the distribution of income and wealth within the country changed over this period. This column presents the first systematic estimates of the level and structure of China’s national wealth since the beginning of the market reform process. The national wealth-income ratio increased from 350% in 1978 to 700% in 2015, driven mainly by the increase of private wealth.

Guido Alfani, 15 January 2017

Recent research into the share of wealth owned by the richest households has given us important insights into trends in inequality. This column shows how we can now estimate the share of wealth owned by the richest households in Europe, and how many they numbered, from 1300 to the present day. Throughout this time, the only significant declines in inequality were the result of the Black Death and the World Wars.

Thomas Piketty, 07 January 2017

Anthony B. Atkinson passed away on the morning of 1 January 2017 at the age of 72, after a long illness. This column describes how he established a unique place for himself among economists over the past half-decade by putting the question of inequality at the centre of his work while demonstrating that economics is first and foremost a social and moral science, in defiance of prevailing trends. 

Adrian Adermon, Mikael Lindahl, Daniel Waldenström, 27 November 2016

Recent studies on intergenerational income mobility have looked beyond the two-generational model to the role of grandparents, but multigenerational patterns in the wealth distribution have received less attention. This column uses a Swedish four-generational wealth dataset to study the role of family background for people’s wealth status and how much of this that is due to material inheritance. Most of the transmission in wealth status between generations comes from parents in the form of bequests and gifts, with only a marginal contribution from grandparents. 

Olympia Bover, Jose Maria Casado, Sónia Costa, Philip Du Caju, Yvonne McCarthy, Eva Sierminska, Panagiota Tzamourani, Ernesto Villanueva, Tibor Zavadil, 08 November 2016

Household micro-data reveal striking differences in secured debt holdings across Eurozone countries. This column presents new evidence on the role of household characteristics and country institutions in accounting for the cross-country patterns observed. In countries with lengthier asset repossession periods, young or low-income households face higher borrowing costs, leading to a lower probability of holding mortgages.

Pages

Blogs&Reviews

Vox Talks

Events

CEPR Policy Research