Wealth distribution and social mobility in the US: A quantitative approach

Jess Benhabib, Alberto Bisin, Mi Luo

    Research output: Contribution to journalArticle

    Abstract

    We quantitatively identify the factors that drive wealth dynamics in the United States and are consistent with its skewed cross-sectional distribution and with social mobility. We concentrate on three critical factors: (i) skewed earnings, (ii) differential saving rates across wealth levels, and (iii) stochastic idiosyncratic returns to wealth. All of these are fundamental for matching both distribution and mobility. The stochastic process for returns which best fts the cross-sectional distribution of wealth and social mobility in the United States shares several statistical properties with those of the returns to wealth uncovered by Fagereng et al. (2017) from tax records in Norway.

    Original languageEnglish (US)
    Pages (from-to)1623-1647
    Number of pages25
    JournalAmerican Economic Review
    Volume109
    Issue number5
    DOIs
    StatePublished - May 2019

    ASJC Scopus subject areas

    • Economics and Econometrics

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