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We assess the empirical relevance of different macroeconomic modeling
approaches to wealth concentration, using the joint distribution of earnings,
capital income and net worth in combination with an OLG model
of household heterogeneity. We find large earnings disparities to be the
primary source of US wealth concentration. This reflects the fact that
labor income, from salaries but also from entrepreneurship, is a major
income source for top income and wealth groups in the data. Bequests
and differences in rates of return on capital together explain about half
the holdings of the wealthiest of households.
