Income inequality has sharply increased in the United States since the late 1970s, yet currently available evidence suggests that wealth concentration has not grown nearly as much. One possible explanation is that rising inequality is purely a labor income phenomenon: despite an upsurge in top wage and entrepreneurial incomes (Piketty and Saez, 2003), the working rich might not have had enough time yet to accumulate a lot of wealthÃ¢Â€Â”perhaps because they have low saving rates, face high tax rates, or have low returns on assets. Should this be true, the implications for analyzing the US economy and for policy-making would be far-reaching. Our paper, however, challenges this view. On the basis of new, annual, long-run series, we find that wealth inequality has considerably increased at the top over the last three decades. By our estimates, almost all of this increase is due to the rise of the share of wealth owned by the 0.1% richest families, from 7% in 1978 to 22% in 2012, a level comparable to that of the early twentieth century.
About Emmanuel Saez - About Gabriel Zucman - About Prizm Share
NBER WORKING PAPER SERIES
WEALTH INEQUALITY IN THE UNITED STATES SINCE 1913:
EVIDENCE FROM CAPITALIZED INCOME TAX DATA
Working Paper 20625
NATIONAL BUREAU OF ECONOMIC RESEARCH
1050 Massachusetts Avenue
Cambridge, MA 02138
We thank Tony Atkinson, Mariacristina DeNardi, Matthieu Gomez, Barry W. Johnson, Maximilian
Kasy, Lawrence Katz, Arthur Kennickell, Wojciech Kopczuk, Moritz Kuhn, Thomas Piketty, Jean-Laurent
Rosenthal, John Sabelhaus, Amir Sufi, Edward Wolff, and numerous seminar and conference participants
for helpful discussions and comments. Juliana Londono-Velez provided outstanding research assistance.
We acknowledge financial support from the Center for Equitable Growth at UC Berkeley, and the
MacArthur foundation. A complete set of Appendix tables and figures supplementing this article is
available online at http://eml.berkeley.edu/~saez and http://gabriel-zucman.eu/uswealth The views
expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau
of Economic Research.
NBER working papers are circulated for discussion and comment purposes. They have not been peer-
reviewed or been subject to the review by the NBER Board of Directors that accompanies official
Â© 2014 by Emmanuel Saez and Gabriel Zucman. All rights reserved. Short sections of text, not to
exceed two paragraphs, may be quoted without explicit permission provided that full credit, including
Â© notice, is given to the source.
Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax
Emmanuel Saez and Gabriel Zucman
NBER Working Paper No. 20625
JEL No. H2,N32
This paper combines income tax returns with Flow of Funds data to estimate the distribution of household
wealth in the United States since 1913. We estimate wealth by capitalizing the incomes reported by
individual taxpayers, accounting for assets that do not generate taxable income. We successfull