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Wealth Dynamics in the 1980’s and 1990’s: Sweden and the U.S

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Author Info
Klevmarken, Anders () (Department of Economics)
Lupton, Joseph (Institute for Social Research and)
Stafford, Frank () (Institute for Social Research and)

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Abstract

Given differences in public saving programs between Sweden and the United States, an examination of household private wealth accumulation in these two countries can be enlightening. In this paper we examine wealth inequality and mobility in Sweden and the United States over the past decade. We show that wealth inequality has been significantly greater in the U.S. than in Sweden and, while remaining relatively constant since the mid-1980’s in Sweden, has increased in the United States. In addition to less inequality and a higher median wealth, we also show that wealth quintile mobility in the 1990’s has been 25.7% higher in Sweden, as measured by Shorrocks’ index. Noting the role of various demographic components in shaping the patterns of wealth mobility as well as the importance of the initial wealth distribution, we utilize a matching algorithm that controls for these differences. Matching on the initial wealth distribution alone accounts for most of the mobility difference between the two countries and yields a Shorrocks’ index in the U.S. 11.1% less than that in Sweden. Adjusting for the large degree of imputation in the Swedish data, the U.S. index is only 3.4% to 6.1% less than that of Sweden. Along with exploring the role of racial composition differences, we conclude tha demographic variation between Sweden and the U.S. play very little role in explaining wealth mobility beyond that explained by the initial wealth distribution. Despite the higher quintile mobility in Sweden, dollar mobility is still high in the United States.

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Publisher Info
Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2000:18.

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Length: 39 pages
Date of creation: 01 Nov 2000
Date of revision:
Publication status: Published in Journal of Human Resources, 2003, pages 322-353.
Handle: RePEc:hhs:uunewp:2000_018

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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
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Web page: http://www.nek.uu.se/
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Related research
Keywords: Mobility; Wealth; Panel data; Statistical matching; Comparison U.S. - Sweden;

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Find related papers by JEL classification:
C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Statistical Simulation Methods
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Bisin, A. & Verdier, T., 1997. "On the Cultural Transmission of Preferences for Social Status," DELTA Working Papers 97-04, DELTA (Ecole normale supérieure).
    Other versions:
  2. Christopher D. Carroll, 1991. "Buffer stock saving and the permanent income hypothesis," Working Paper Series / Economic Activity Section 114, Board of Governors of the Federal Reserve System (U.S.).
  3. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June. [Downloadable!] (restricted)
  4. Menchik, Paul L & Jianakoplos, Nancy Ammon, 1997. "Black-White Wealth Inequality: Is Inheritance the Reason?," Economic Inquiry, Oxford University Press, vol. 35(2), pages 428-42, April.
  5. Blau, Francine D & Graham, John W, 1990. "Black-White Differences in Wealth and Asset Composition," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 321-39, May. [Downloadable!] (restricted)
    Other versions:
  6. repec:att:wimass:199722 is not listed on IDEAS
  7. Deaton, Angus, 1991. "Saving and Liquidity Constraints," Econometrica, Econometric Society, vol. 59(5), pages 1221-48, September. [Downloadable!] (restricted)
    Other versions:
  8. Shorrocks, A F, 1978. "The Measurement of Mobility," Econometrica, Econometric Society, vol. 46(5), pages 1013-24, September. [Downloadable!] (restricted)
  9. F. Thomas Juster & James P. Smith, 2004. "Improving the Quality of Economic Data: Lessons from the HRS and AHEAD," Labor and Demography 0402010, EconWPA. [Downloadable!]
  10. Kerwin Kofi Charles & Erik Hurst, 2002. "The Transition To Home Ownership And The Black-White Wealth Gap," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 281-297, May. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hugh Rockoff, 2008. "Great Fortunes of the Gilded Age," NBER Working Papers 14555, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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