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Income and wealth volatility: evidence from Italy and the U.S. in the past two decades

Author

Listed:
  • Giorgia Menta

    (University of Luxembourg)

  • Edward N. Wolff

    (New York University)

  • Conchita D’ Ambrosio

    (University of Luxembourg)

Abstract

Income volatility and wealth volatility are central objects of investigation for the literature on income and wealth inequality and dynamics. Here we analyse the two concepts in a comparative perspective for the same individuals in Italy and the U.S. over the last two decades. We find that in both countries wealth volatility reaches significantly higher values than income volatility, the effect being mostly driven by changes in the market value of real estate assets. We also show that there is more volatility in both dimensions in the U.S. and that the overall trend in both countries is increasing over time. We conclude by exploring volatility in consumption.

Suggested Citation

  • Giorgia Menta & Edward N. Wolff & Conchita D’ Ambrosio, 2021. "Income and wealth volatility: evidence from Italy and the U.S. in the past two decades," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(2), pages 293-313, June.
    • Handle: RePEc:spr:joecin:v:19:y:2021:i:2:d:10.1007_s10888-020-09473-4
    DOI: 10.1007/s10888-020-09473-4
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    Cited by:

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    2. Larsen, Vance & Carriaga, Riona & Wething, Hilary & Zhao, Jiaying & Hall, Crystal, 2023. "Behavioral consequences of income and expense shocks," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 106(C).
    3. Jonathan D. Fisher & David S. Johnson, 2020. "Inequality and Mobility over the Past Half-Century Using Income, Consumption, and Wealth," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 437-455, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Income volatility; Wealth volatility; PSID; SHIW;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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