IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v230y2023ics0165176523002604.html
   My bibliography  Save this article

Rising inequality and declining mobility in the Forbes 400

Author

Listed:
  • Fernholz, Ricardo T.
  • Hagler, Kara

Abstract

We examine the joint evolution of inequality and mobility from 1985–2020 using a novel data set of intergenerational family wealth dynamics constructed from the Forbes 400 list of wealthiest Americans. In recent decades, the concentration of wealth at the very top of the distribution has risen in the U.S. Over this same period, we show that mobility among the wealthiest American family dynasties has declined, with mobility measured either as family wealth-rank correlations over one-year and five-year periods or as the number of new entrants at the top of the distribution.

Suggested Citation

  • Fernholz, Ricardo T. & Hagler, Kara, 2023. "Rising inequality and declining mobility in the Forbes 400," Economics Letters, Elsevier, vol. 230(C).
    • Handle: RePEc:eee:ecolet:v:230:y:2023:i:c:s0165176523002604
    DOI: 10.1016/j.econlet.2023.111235
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176523002604
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2023.111235?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert Arnott & William Bernstein & Lillian Wu, 2015. "The Myth of Dynastic Wealth: The Rich Get Poorer," Cato Journal, Cato Journal, Cato Institute, vol. 35(3), pages 447-485, Fall.
    2. Andrew G. Atkeson & Magnus Irie, 2022. "Rapid Dynamics of Top Wealth Shares and Self-Made Fortunes: What Is the Role of Family Firms?," American Economic Review: Insights, American Economic Association, vol. 4(4), pages 409-424, December.
    3. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2018. "Distributional National Accounts: Methods and Estimates for the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 553-609.
    4. Emmanuel Saez & Gabriel Zucman, 2016. "Editor's Choice Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 519-578.
    5. Xavier Gabaix & Rustam Ibragimov, 2011. "Rank - 1 / 2: A Simple Way to Improve the OLS Estimation of Tail Exponents," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(1), pages 24-39, January.
    6. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    7. Chan, Stephen & Chu, Jeffrey & Nadarajah, Saralees, 2017. "Is the wealth of the Forbes 400 lists really Pareto distributed?," Economics Letters, Elsevier, vol. 152(C), pages 9-14.
    8. Klass, Oren S. & Biham, Ofer & Levy, Moshe & Malcai, Ofer & Solomon, Sorin, 2006. "The Forbes 400 and the Pareto wealth distribution," Economics Letters, Elsevier, vol. 90(2), pages 290-295, February.
    9. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez & Nicholas Turner, 2014. "Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility," American Economic Review, American Economic Association, vol. 104(5), pages 141-147, May.
    10. Matthew Smith & Owen Zidar & Eric Zwick, 2023. "Top Wealth in America: New Estimates Under Heterogeneous Returns," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 515-573.
    11. Matthieu Gomez, 2023. "Decomposing the Growth of Top Wealth Shares," Econometrica, Econometric Society, vol. 91(3), pages 979-1024, May.
    12. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    13. Ricardo T. Fernholz, 2017. "Nonparametric methods and local†time†based estimation for dynamic power law distributions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 32(7), pages 1244-1260, November.
    14. Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2010. "Earnings Inequality and Mobility in the United States: Evidence from Social Security Data Since 1937," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 91-128.
    15. Fernholz, Ricardo T., 2016. "A Model of economic mobility and the distribution of wealth," Journal of Macroeconomics, Elsevier, vol. 50(C), pages 168-192.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lucas Chancel, 2019. "Ten facts about income inequality in advanced economies," Working Papers hal-02876982, HAL.
    2. Matthew Smith & Owen Zidar & Eric Zwick, 2020. "Top Wealth in America: New Estimates and Implications for Taxing the Rich," Working Papers 264, Princeton University, Department of Economics, Center for Economic Policy Studies..
    3. Mario Alloza, 2021. "The impact of taxes on income mobility," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(4), pages 794-854, August.
    4. Orhan Torul & Oguz Oztunali, 2017. "Intergenerational Educational Mobility in Europe," Working Papers 2017/03, Bogazici University, Department of Economics.
    5. Laura Feiveson & Nils M. Gornemann & Julie L. Hotchkiss & Karel Mertens & Jae W. Sim, 2020. "Distributional Considerations for Monetary Policy Strategy," Finance and Economics Discussion Series 2020-073, Board of Governors of the Federal Reserve System (U.S.).
    6. Arun Advani & George Bangham & Jack Leslie, 2021. "The UK's wealth distribution and characteristics of high‐wealth households," Fiscal Studies, John Wiley & Sons, vol. 42(3-4), pages 397-430, September.
    7. David Splinter, 2022. "Income Mobility and Inequality: Adult‐Level Measures From the Us Tax Data Since 1979," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(4), pages 906-921, December.
    8. Atif Mian & Ludwig Straub & Amir Sufi, 2021. "Indebted Demand," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2243-2307.
    9. Palagi, Elisa & Napoletano, Mauro & Roventini, Andrea & Gaffard, Jean-Luc, 2023. "An agent-based model of trickle-up growth and income inequality," Economic Modelling, Elsevier, vol. 129(C).
    10. Sofie R. Waltl & Robin Chakraborty, 2022. "Missing the wealthy in the HFCS: micro problems with macro implications," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 169-203, March.
    11. Berman, Yonatan, 2018. "Inclusive Growth and Absolute Intragenerational Mobility in the United States, 1962-2014," MPRA Paper 89572, University Library of Munich, Germany.
    12. Kreiner, Claus Thustrup & Olufsen, Isabel Skak, 2022. "Is inequality in subjective well-being meritocratic? Danish evidence from linked survey and administrative data," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 336-367.
    13. Stefania Bortolotti & Ivan Soraperra & Matthias Sutter & Claudia Zoller, 2017. "Too Lucky to be True - Fairness Views under the Shadow of Cheating," CESifo Working Paper Series 6563, CESifo.
    14. Ji Hyung Lee & Yuya Sasaki & Alexis Akira Toda & Yulong Wang, 2021. "Fixed-k Tail Regression: New Evidence on Tax and Wealth Inequality from Forbes 400," Papers 2105.10007, arXiv.org, revised Sep 2022.
    15. Moritz Kuhn & Moritz Schularick & Ulrike I. Steins, 2020. "Income and Wealth Inequality in America, 1949–2016," Journal of Political Economy, University of Chicago Press, vol. 128(9), pages 3469-3519.
    16. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    17. Marie Connolly & Catherine Haeck, 2024. "Intergenerational income mobility trends in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(1), pages 5-26, February.
    18. Neidhöfer, Guido & Serrano, Joaquín & Gasparini, Leonardo, 2018. "Educational inequality and intergenerational mobility in Latin America: A new database," Journal of Development Economics, Elsevier, vol. 134(C), pages 329-349.
    19. Yannic Rehm & Lucas Chancel, 2022. "Measuring the Carbon Content of Wealth Evidence from France and Germany," PSE Working Papers halshs-03828939, HAL.
    20. Baochun Peng & Haidong Yuan, 2021. "Dynamic Fairness: Mobility, Inequality, and the Distribution of Prospects," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(4), pages 1314-1338, October.

    More about this item

    Keywords

    Inequality; Mobility; Power laws; Forbes 400;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D30 - Microeconomics - - Distribution - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:230:y:2023:i:c:s0165176523002604. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.