Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014)

127 Pages Posted: 6 Jul 2017

See all articles by Bertrand Garbinti

Bertrand Garbinti

Banque de France

Jonathan Goupille -Lebret

Ecole Normale Supérieure (ENS) de Lyon; Groupe d'Analyse et de Theorie Economique (GATE), CNRS, University of Lyon; INSEAD

Thomas Piketty

Paris School of Economics (PSE)

Date Written: june 2017

Abstract

This paper combines different sources and methods (income tax data, inheritance registers, national accounts, wealth surveys) in order to deliver consistent, unified wealth distribution series for France over the 1800-2014 period. We find a large decline of the top 10% wealth share from the 1910s to 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. We develop 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. We discuss the conditions under which rising concentration is likely to continue in the coming decades.

Keywords: saving rate, steady-state, wealth inequality

JEL Classification: D31 E21 N34

Suggested Citation

Garbinti, Bertrand and Goupille -Lebret, Jonathan and Piketty, Thomas, Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014) (june 2017). Banque de France Working Paper No. WP 633, Available at SSRN: https://ssrn.com/abstract=2997069 or http://dx.doi.org/10.2139/ssrn.2997069

Bertrand Garbinti (Contact Author)

Banque de France ( email )

Paris
France

Jonathan Goupille -Lebret

Ecole Normale Supérieure (ENS) de Lyon ( email )

15, parvis Rene Descartes BP 7000
Lyon Cedex 07, 69342
France

Groupe d'Analyse et de Theorie Economique (GATE), CNRS, University of Lyon ( email )

93 Chemin des Mouilles
Ecully, 69130
France

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

Thomas Piketty

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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