Reference: COWELL Frank, NOLAN Brian, OLIVERA Javier, VAN KERM Philippe. Wealth, top incomes and inequality. In: Kirk Hamilton and Cameron Hepburn (Eds.) National Wealth: What is missing, why it matters. New York: Oxford University Press, 2017, pp. 175-206.Authors: COWELL Frank, NOLAN Brian, OLIVERA Javier, VAN KERM Philippe.
Abstract: Although it is heartening to see wealth inequality being taken seriously, key concepts are often muddled, including the distinction between income and wealth, what is included in "wealth", and facts about wealth distributions. This chapter highlights issues that arise in making ideas and facts about wealth inequality precise, and employs newly-available data to take a fresh look at wealth and wealth inequality in a comparative perspective. The composition of wealth is similar across countries, with housing wealth being the key asset. Wealth is considerably more unequally distributed than income, and it is distinctively so in the United States. Extending definitions to include pension wealth however reduces inequality substantially. Analysis also sheds light on life-cycle patterns and the role of inheritance. Discussion of the joint distributions of income and wealth suggests that interactions between increasing top income shares and the concentration of wealth and income from wealth towards the top is critical.