March 31, 2020
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Wealth inequality dynamics

How to measure wealth inequality dynamics?

In this paper, Bertrand Garbinti, Jonathan Goupille-Lebret and Thomas Piketty present a new method to estimate wealth inequality. They combine fiscal data with household surveys and national accounts in order to provide annual wealth distribution series.

First version of this working paper: “Accounting for Wealth Inequality Dynamics“, 2016/5

Key results

In conclusion and using the case of France, they show that the resulting series can be used to better analyze the evolution and the determinants of wealth inequality dynamics. Below are four key results:

  • The decline in wealth inequality ends in the early 1980s, marking the beginning of a rise in the top 1% wealth share.
  • Rising inequality in saving rates, coupled with highly stratified rates of returns, has led to rising wealth concentration in spite of the opposing effect of house price increases.
  • Changes in the combination of unequal saving rates, rates of return and labor earnings that occurred in the early 1980s generated large multiplicative effects that led to radically different steady-state levels of wealth inequality
  • Top wealth holders are almost exclusively top capital earners, and less and less are made up of top labor earners.

(You can also check our data on wealth inequality in France)

Recommendations to better capture wealth inequality dynamics

In order to better capture wealth inequality dynamics, the authors recommend:

  • To substantially improve its measurement by combining data sources and methods. This will lead to a better understanding of the long-run evolution of wealth distribution;
  • To pay greater attention to inequality in saving rates, labor income and rates of return across wealth groups. Small changes in these key parameters can have very large long-run effects on steady-state wealth inequality.


As an illustration, the figure below displays the evolution of wealth inequality in France (1800-2014).

Measuring wealth inequality France -World Inequality Lab

Finally, the Journal of the European Economic Association accepted the paper and will  publish it here.