Abstract

We determine the independent contribution of several demographic trends to rising U.S. wealth inequality over the last three decades. Using data from the Survey of Consumer Finances from 1989 through 2019 and novel decomposition techniques, we show that rapid growth in wealth inequality and increasing wealth concentration at the top coincided with important changes in the demographic composition of the country but that the two are not directly related. However, the shifts in the wealth distribution among demographic groups, in particular the move of households with less education and non-elderly households away from the middle of the distribution, explain much of the observed overall growth in inequality. Part, but not all, of these demographic contributions to rising wealth inequality operate through their contributions to rising income inequality.

This seminar is part of the Semilux-LIS^2ER Spring series