February 3, 2025
Written by WID.world

New estimates of wealth inequality based on the distribution of estates

The study of the inequality of wealth holds a central place in the research and policy agendas today. However, the overall picture remains highly incomplete, as reliable estimates are still predominantly limited to a few developed nations.

In this paper, Facundo Alvaredo, Yonatan Berman, and Salvatore Morelli, examine the estimation of the distribution of wealth using estates left at death.

  • They establish formal conditions for implementing a simplified version of the classic estate multiplier method, relying solely on minimal information about estates and mortality.
  • These conditions are empirically validated, and the simplified approach is applied to produce new long-run top wealth share series for Belgium, Japan, and South Africa, where estate data have previously been underutilized.
  • This method holds potential for expanding the range of countries and years in which wealth concentration can be estimated, especially where estate data exist but the standard method with heterogeneous multipliers is inapplicable.
  • Such estimates, particularly concerning top wealth shares, are increasingly important for policy considerations, especially in light of recent debates and proposals regarding wealth taxation.

AUTHORS

  • Facundo Alvaredo, Paris School of Economics, World Inequality Lab, IIEP-UBA, LSE-III
  • Yonatan Berman, King’s College London, LSE-III, and IZA
  • Salvatore Morelli, Universit`a Roma Tre and Stone Center on Socio-Economic Inequality, City University of New York

 

MEDIA CONTACT

  • Alice Fauvel, Communications Manager, press[at]wid.world
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