The wealth distribution in developed and developing economies: comparing the United States to Chile using survey data from 2007
Abstract
This study examines the distributions of income, assets, debt, and wealth within Chile, using data from the 2007 Household Financial Survey. We detail inequality at the aggregate level and also by a variety of subgroups, including age, gender, household type, employment type, and educational attainment. In comparison with data from the US Survey of Consumer Finances, we find that income and debt are more unequally distributed in Chile than in the US, but assets and wealth are more equally distributed in Chile than in the US. Our results suggest that, among common theories that seek to explain wealth inequality in the US, high payoffs to and the incentives imposed by entrepreneurship are the most plausible.
Full text article
References
Alfaro, R., Gallardo, N., & Stein, R. (2010). The determinants of household debt default. Mimeo.
Berstein, S. (Ed.). (2010). Unemployment insurance in Chile. Santiago, Chile: Superintendencia de Pensiones.
Bover, O. (2010). Wealth inequality and household structure: U.S. vs. Spain. Review of Income and Wealth, 56(2), 259–290.
Cagetti, M., & de Nardi, M. (2006). Entrepreneurship, frictions and wealth. Journal of Political Economy, 114(322), 835–870.
Cagetti, M., & de Nardi, M. (2008). Wealth inequality: Data and models. Macroeconomic Dynamics, 12, 285–313.
Cordoba, J. C. (2008). U.S. inequality: Debt constraints or incomplete asset markets? Journal of Monetary Economics, 55, 350–364.
De Nardi, M. (2004). Wealth inequality and intergenerational links. Review of Economic Studies, 71, 743–768.
DiNardo, J., Fortin, N. M., & Lemieux, T. (1996). Labor market institutions and the distribution of wages, 1973-1992: A semiparametric approach. Econometrica, 64(5), 1001–1044.
Domeij, D., & Heathcote, J. (2004). On the distributional effects of reducing capital taxes. International Economic Review, 45, 523–554.
Fairfield, T., & Jorratt De Luis, M. (2015). Top income shares, business profits, and effective tax rates in contemporary Chile. Review of Income and Wealth, 62(1), 120–144.
Guner, N., Kaygusuz, R., & Ventura, G. (2014). Income taxation of U.S. households: Facts and parametric estimates. Review of Economic Dynamics, 17(4), 559–581.
Heathcote, J., Perri, F., & Violante, G. L. (2010). Unequal we stand: An empirical analysis of economic inequality in the United States, 1967–2006. Review of Economic Dynamics, 13(1), 15–51.
Huggett, M. (1996). Wealth distribution in life-cycle economies. Journal of Monetary Economics, 38(3), 469–494.
Madeira, C. (2011). Computing population weights for the EFH survey. Mimeo.
Madeira, C. (2015). Identification of earnings dynamics using rotating samples over short periods: The case of Chile (Working Paper No. 754). Central Bank of Chile.
Quadrini, V. (2000). Entrepreneurship, saving, and social mobility. Review of Economic Dynamics, 3(1), 1–40.
Quadrini, V., & Ríos-Rull, J.-V. (1997). Understanding the U.S. distribution of wealth. Federal Reserve Bank of Minneapolis Quarterly Review, 21(2), 1–21.
Saez, E., & Zucman, G. (2014). Wealth inequality in the United States since 1913: Evidence from capitalized income tax data. Technical Report, National Bureau of Economic Research.
Sanhueza, C., & Mayer, R. (2011). Top incomes in Chile using 50 years of household surveys: 1957-2007. Estudios de Economía, 38(1), 169–193.
Uribe, F., & Martinez, F. E. (2016). Determinants of household position in the wealth distribution in Chilean households. Mimeo.
Authors
Copyright (c) 2019 Sofia Bauducco, Gonzalo Castex, Andrew Davis
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Copyright / Open Access Policy: This journal provides immediate free open access to its content on the principle that making research freely available to the public supports a greater global exchange of ideas and is distributed under the terms and conditions of the Creative Commons Attribution License (CC BY).
The copyright will be retained by the authors. Articles are free for personal use but are protected by copyright in the sense that they may not be used for purposes other than personal use without the permission of the author.