Accounting for wealth inequality and its change: decomposition analyses for the US, 1995-2019

ABSTRACT

This paper decomposes the components of wealth inequality and its change in the United States during the period 2006–2016. The results show that wealth inequality in the US is extremely high. Real estate, non-housing assets and financial investments are the first three important components of equivalent wealth and overall inequality. Financial investments, real estate liabilities and non-housing liabilities have positive marginal impacts on overall inequality, while other assets’ marginal impacts are negative. Financial investments changes had the largest impact on the aggregate trends of wealth inequality.

KEYWORDS:

• Wealth inequality
• wealth component
• decomposition
• marginal impact

JEL CLASSIFICATION:

• D30
• D31
• D63

Disclosure statement

No potential conflict of interest was reported by the author(s).