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How Much has Wealth Concentration Grown in the United States? A Re-Examination of Data from 2001-2013

Jesse Bricker, Alice M. Henriques and Lars Peter Hansen

No 2018-024, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: 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)
New Economics Papers: this item is included in nep-mac
Date: 2018-04-13
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