The rapid increase of wealth inequality in the past few decades is one of the most disturbing social and economic issues of our time. Studying its origin and underlying mechanisms is essential for policy aiming to control and even reverse this trend. In that context, controlling the distribution of income, using income tax or other macroeconomic policy instruments, is generally perceived as eff...

In this paper, we employ a unique new data set (the Philanthropy Panel Study (PPS), a module within the Panel Study of Income Dynamics (PSID)) to test whether the propensity to donate out of inherited wealth is equal to the propensities to donate out of other wealth, earned income, and transfer payments. We find that the elasticity of giving from non-inherited wealth is much greater than from i...

Equity mutual fund loads have fallen, while stock ownership rates and equity mutual fund use have risen, plausibly boosting the stock wealth elasticity of U.S. consumption. Because of limited wealth and diversification needs, load declines likely spurred middle-income families to invest in equity, consistent with cross-section data and the calibration model of Heaton and Lucas (2000). In load-m...

This paper studies the business cycle dynamics of income and wealth distributions in the context of the neoclassical growth model where agents are heterogeneous in initial wealth and non-acquired skills. Our economy admits a representative consumer which enables us to characterize distributive dynamics by the evolution of aggregate quantities. We show that inequality in both wealth and income f...

by Audra T. Wenzlow, John Mullahy, Stephanie A. Robert, and Barbara L. Wolfe We explore the relationship between health and wealth and between health and income using the Survey of Consumer Finances. We focus on the working-age population, describing the shape of the health-income and health-wealth gradients for individuals between ages 25 and 54. We find that the health-wealth relationship is ...

Drawing on the author’s work, this lecture presents evidence on U.S. income and wealth inequality. It presents series for top income and wealth shares, and the distribution of economic growth by income groups. It discusses the mechanisms behind the evolution of U.S. income and wealth inequality from historical and comparative perspectives. It analyzes the role of public policy and in particular...