The concentration of personal wealth is now receiving a great deal of attention – after having been neglected for many years. One reason is the growing recognition that, in seeking explanations for rising income inequality, we need to look not only at wages and earned income but also at income from capital, particularly at the top of the distribution. In this paper, we use evidence from existing data sources to attempt to answer three questions: (i) what is the share of total personal wealth that is owned by the top 1 per cent, or the top 0.1 per cent? (ii) is wealth much more unequally distributed than income? (iii) is the concentration of wealth at the top increasing over time? The main conclusion of the paper is that the evidence about the UK concentration of wealth post-2000 is seriously incomplete and significant investment is necessary if we are to provide satisfactory answers to the three questions.
Facundo Alvaredo, Tony Atkinson, Salvatore Morelli, Sunday, September 6, 2015 - 00:00
Alan J Auerbach, Kevin Hassett, Tuesday, March 3, 2015 - 00:00
Jesper Roine, Henry Ohlsson, Daniel Waldenström, Friday, August 8, 2014 - 00:00
The extent to which lifetime incomes are determined by inherited wealth is a politically sensitive issue, but long-run evidence on this question is limited. This column presents evidence on Swedish inheritance flows since the early 19th century. Despite a long history of aristocracy, accumulated capital was small relative to income in pre-industrial Sweden. In more recent times, Sweden stands out as a country where the return of capital has not automatically translated into a return of inherited wealth.
Per Krusell, Tony Smith, Sunday, June 1, 2014 - 00:00
Thomas Piketty’s new book has been widely praised for its empirical contribution, but his prediction of rising inequality rests on economic theory. This column argues that Piketty’s pessimistic forecast is based on an extreme – and unrealistic – assumption about households’ saving behaviour. According to standard theory, the wealth–income ratio would increase only modestly as growth falls, so declining growth would not be a powerful force for generating high inequality.
Tony Atkinson, Salvatore Morelli, Wednesday, March 26, 2014 - 00:00
Inequality – long ignored – is now centre stage in debate about economic policy around the globe. This column introduces the Chartbook of Economic Inequality, a summary of long-run changes in economic inequality for 25 countries over more than 100 years.
Angus Deaton, Thursday, March 20, 2014 - 00:00
The world has become healthier and wealthier since 1960, as measured by life expectancy and GDP per capita. In this column Angus Deaton introduces his new book and argues that the world is indeed a better place than it used to be, albeit with big setbacks, and that progress opens up vast inequalities.
Michael Keen, Wednesday, October 16, 2013 - 00:00
Fiscal consolidation, and public concern that its pain be fairly spread, is putting tax systems under considerable pressure. This column takes stock of how they have been faring, and how they could do better.
Sambit Bhattacharyya, Jeffrey G. Williamson, Saturday, August 10, 2013 - 00:00
What distributional effect do natural-resource booms have on wealth, income and economic power? Using Australia as a case study, this column argues that resource booms tend to exacerbate inequality. The distributional impact of commodity-price shocks in Australia yield important lessons for primary producers from the developmental south, and it’s important for resource-rich developing countries to design appropriate policies to tackle this inequality.
Josep Pijoan-Mas, Víctor Ríos-Rull, Sunday, September 30, 2012 - 00:00
What explains differences in life expectancy at age 50? This column looks at the effect of wealth, education, and marital status. It finds that by far the most important factor is education, and explores what this might mean for policy.
Heiko Hesse, Thursday, October 16, 2008 - 00:00
This column examines the impact of stock market valuation changes on consumption and investment in emerging markets. Though the effects are smaller than those in advanced economies, emerging market policymakers ought to pay attention to how equity price swings will transmit business cycles and impact aggregate demand.
Quamrul Ashraf, Oded Galor, Thursday, September 13, 2007 - 00:00
A thousand years ago, Asia was ahead. Why is Europe richer now? Asia was geographically less vulnerable to cultural diffusion and thus benefited from enhanced assimilation, lower cultural diversity and greater accumulation of society-specific human capital; this was an edge in the agricultural stage. Greater cultural rigidity, however, diminished the ability to adapt to a new technological paradigm, delaying their industrialisation.
Graziella Bertocchi, Sunday, July 15, 2007 - 00:00
Inheritance tax revenues have long been declining in all OECD countries, both in terms of total revenues and GDP. This trend is explained by the secular decline of wealth inequality, and is also influenced by differential rates of tax avoidance and by the evolving composition of wealth.