American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Accounting for Wealth Concentration in the United States
American Economic Journal: Macroeconomics
(pp. 187–222)
Abstract
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 households.Citation
Kaymak, Bariş, David Leung, and Markus Poschke. 2026. "Accounting for Wealth Concentration in the United States." American Economic Journal: Macroeconomics 18 (1): 187–222. DOI: 10.1257/mac.20210174Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- E25 Aggregate Factor Income Distribution
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- J23 Labor Demand
- J31 Wage Level and Structure; Wage Differentials
- L26 Entrepreneurship