The distribution of wealth in Spain and the USA: the role of socioeconomic factors

Salas-Rojo, Pedro and Rodríguez, Juan Gabriel (2021) The distribution of wealth in Spain and the USA: the role of socioeconomic factors. SERIEs, 12 (3). pp. 389-421. ISSN 1869-4187

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Abstract

The literature has typically found that the distribution of socioeconomic factors like education, labor status and income does not account for the remarkable wealth inequality disparities between countries. As a result, their different institutions and other latent factors receive all the credit. Here, we propose to focus on one type of wealth inequality, the inequality of opportunities (IOp) in wealth: the share of overall wealth inequality explained by circumstances like inheritances and parental education. By means of a counterfactual decomposition method, we find that imposing the distribution of socioeconomic factors of the USA into Spain has little effect on total, financial and real estate wealth inequality. On the contrary, these factors play an important role when wealth IOp is considered. A Shapley value decomposition shows that the distribution of education and labor status in the USA consistently increase wealth IOp when imposed into Spain, whereas the opposite effect is found for the distribution of income.

Item Type:	Article
Additional Information:	© 2021, The Author(s).
Divisions:	International Inequalities Institute
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HG Finance H Social Sciences
JEL classification:	C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology; Computer Programs > C81 - Methodology for Collecting, Estimating, and Organizing Microeconomic Data D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Date Deposited:	04 Dec 2023 12:00
Last Modified:	04 Jan 2024 11:15
URI:	http://eprints.lse.ac.uk/id/eprint/120915

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