Kopczuk: What do we know about the Evolution of Top Wealth Shares in the U.S.? (2015)
The Point: The data we have on wealth inequality is far less reliable than the data we have on income and wages. In this paper, Kopczuk provides an overview of the three main methods currently used to study the distribution of wealth in the United States.
The Quote: "[T]he extent to which the well-off are going to rely on work versus rely on the returns to their wealth in the future is clearly important for assessing the extent to which a society will view itself as in some way a meritocracy."
The Method/Data: The three methods Kopczuk summarizes are the following: survey based data from the Survey of Consumer Finances; the 'estate multiplier method' which uses data from estate tax returns; and the 'capitalization method' which uses data on capital income reported on individual income tax returns. The survey and estate multiplier method do not show any significant increase in the top 1 percent's share of wealth in recent decades, but the capitalization method has.
A copy of the paper can be found here.
Citation: Kopczuk, Wojciech. 2015. "What Do We Know about the Evolution of Top Wealth Shares in the United States?" Journal of Economic Perspectives, 29(1): 47-66.
DOI: 10.1257/jep.29.1.47
