How Much has Wealth Concentration Grown in the United States? A Re-Examination of Data from 2001-2013
Alice M. Henriques and
Lars Peter Hansen
No 2018-024, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (US)
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 (search for similar items in EconPapers)
JEL-codes: D31 D14 H00 E6 (search for similar items in EconPapers)
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