Working Paper: NBER ID: w13162
Authors: Lena Edlund; Wojciech Kopczuk
Abstract: The extent of and changes in inter-generational mobility of wealth are central to understanding dynamics of wealth inequality but hard to measure. Using estate tax returns data, we observe that the share of women among the very wealthy (top 0.01%) in the United States peaked in the late 1960s, reaching almost 50%. Three decades on, women's share had declined to one third, a return to pre-war levels. We argue that this pattern mirrors the relative importance of inherited vs. self-made wealth in the economy and thus the gender-composition of the wealthiest may serve as a proxy for inter-generational wealth mobility. This proxy for "dynastic wealth'' suggests that wealth mobility in the past century decreased until the 1970s and rose thereafter, a pattern consistent with technological change driving long term trends in income inequality and mobility. Greater wealth mobility in recent decades is also consistent with the simultaneous rise in top income shares and relatively stable wealth concentration.
Keywords: Women; Wealth; Mobility; Intergenerational Mobility; Inequality
JEL Codes: D31; J62; N32; O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| share of women among the wealthy (D31) | balance between inherited and self-made wealth (D31) |
| decrease in the share of women among the wealthy (D31) | shift towards more self-made wealth (P12) |
| increase in wealth mobility in recent decades (J62) | rising top income shares (D33) |
| balance of inherited versus self-made wealth (D14) | share of women among the very wealthy (D31) |
| wealth mobility (J62) | importance of inherited wealth (D14) |
| decline of women in the top wealth categories (D31) | changes in tax codes, social norms, and geographic distribution of wealth (F61) |