What Do We Know about the Evolution of Top Wealth Shares in the United States?

Wojciech Kopczuk

Journal of Economic Perspectives, 2015, vol. 29, issue 1, 47-66

Abstract: I discuss available evidence about the evolution of top wealth shares in the United States over the course of the 20th century. The three main approaches—the Survey of Consumer Finances, estate tax multiplier, and capitalization methods—generate generally consistent findings until mid-1980s but diverge since then, with the capitalization method showing a dramatic increase in wealth concentration and the other two methods showing at best a small increase. I discuss strengths and weaknesses of different approaches. The increase in capitalization estimates since 2000 is driven by a dramatic and puzzling increase in fixed income assets. There is evidence that estate tax estimates may not be sufficiently accounting for mortality improvements over time. The nonresponse and coverage issues in the SCF are a concern. I conclude that the changing nature of top incomes and the increased importance of self-made wealth may explain difficulties in implementing each of the methods and why the results diverge.

JEL-codes: D31 D63 P16 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/jep.29.1.47
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Citations: View citations in EconPapers (133)

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Related works:
Working Paper: What Do We Know About Evolution of Top Wealth Shares in the United States? (2015)
Working Paper: What Do We Know About Evolution of Top Wealth Shares in the United States? (2014)
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