Journal of Political Economy Vol. 128 No. 9 2020

Income and Wealth Inequality in America, 1949–2016

Moritz Kuhn^1,2; Moritz Schularick^3,1; Ulrike I. Steins¹

¹ University of Bonn · ² IZA - Institute of Labor Economics · ³ Economic Policy Institute

Abstract

This paper introduces a new long-run data set based on archival data from historical waves of the Survey of Consumer Finances. Studying the joint distribution of household income and wealth, we expose the central importance of portfolio composition and asset prices for wealth dynamics in postwar America. Asset prices shift the wealth distribution because of systematic differences in household portfolios along the wealth distribution. Middle-class portfolios are dominated by housing, while rich households predominantly own business equity. Differential changes in equity and house prices shaped wealth dynamics in postwar America and decoupled the income and wealth distribution over extended periods.

DOI

10.1086/708815

Volume

128

Issue

9

Pages

3469-3519

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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