February 14, 2017
Written by WID.world

New paper and series on wealth inequality dynamics in France


This new paper combines different sources and methods (income tax data, inheritance registers, national accounts, wealth surveys) in order to deliver consistent, unified wealth distribution series by percentiles for France over the 1800-2014 period, with detailed breakdowns by age, gender, income and assets over the 1970-2014 sub-period.
Highlights. We find a large decline of the top 10% wealth share from the
1910s to the 1980s (from 80-90% of total wealth during the 19th century up until World War 1, down to 50-60% in the 1980s), mostly to the benefit of the middle 40% of the distribution. Since the 1980s-90s, we observe a moderate rise of wealth concentration, with large fluctuations due to asset price movements. In effect, rising inequality in saving rates and rates of return pushes toward rising wealth concentration, in spite of the contradictory effect of housing prices.
The paper also develops a simple simulation model highlighting how the combination of unequal saving rates, rates of return and labor earnings leads to large multiplicative effects and high steady-state wealth concentration. Small changes in the key parameters appear to matter a lot for long-run inequality. This volatility in long-run inequality reinforces the need for increased democratic transparency about wealth dynamics.
B. Garbinti, J. Goupille-Lebret, T. Piketty, “Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014”, WID.world Working Paper, 2016. Slides. Data Appendix. Data Files.