Time: 12:00-13:00， 26th Nov. 2019

Venue: Room 505

Topic: Accounting for the determinants of wealth concentration in the US

Speaker: David Leung(Assistant Professor, Department of Economics, National Taiwan University )

Abstract：

What are the fundamental determinants of the high level of wealth concentration in the US? The recent literature has put forward high concentration of labor income, capital income risk and bequests as potential reasons. We use data on the joint distribution of earnings, capital income and wealth to identify the quantitative importance of each driving force, and find that labor income concentration is the most important source of wealth dispersion for almost the entire distribution. Some heterogeneity in asset returns is required to match the factor composition of top incomes. It mostly contributes to the fat right tail of the wealth distribution, and to the share of the wealthiest 0.01% of households. These findings reflect the high correlation between earnings and wealth in the data, as well as the fact that earnings account for a large part of income even at the top of the income distribution.