The determinants of wealth inequality in the UK, USA and France
Ozlem Onaran () and
No 31260, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre
This paper analyses the determinants of wealth inequality, measured as the share of wealth owned by the top 1% wealthiest individuals in the UK, the USA and France, using structural vector autoregression (SVAR) models for the periods of 1919-2014 and 1970-2014. We analyse the impact of technological change, globalisation, top marginal income and inheritance tax rates, labour's bargaining power, privatisation and homeownership on wealth inequality. Our results indicate that the only robust and significant determinant across all three countries is the bargaining power of labour – measured by union density in the UK and USA and collective bargaining coverage in France. We find that privatisation does significantly lead to higher top 1% wealth shares in the UK and France, although in the USA the effect is insignificant. Top marginal income tax rates lead to a decline in top wealth shares in the UK but are insignificant in the USA and France.
Keywords: JEL Codes: D31; J50; H24; wealth inequality; income inequality; labour’s bargaining power; technological change; globalisation. (search for similar items in EconPapers)
JEL-codes: D31 H24 J50 (search for similar items in EconPapers)
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