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The Wealth Inequality of Nations

Pfeffer, Fabian T. and Waitkus, Nora (2021) The Wealth Inequality of Nations. American Sociological Review, 86 (4). pp. 567-602. ISSN 0003-1224

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Identification Number: 10.1177/00031224211027800

Abstract

Comparative research on income inequality has produced several frameworks to study the institutional determinants of income stratification. In contrast, no such framework and much less empirical evidence exist to explain cross-national differences in wealth inequality. This situation is particularly lamentable as cross-national patterns of inequality in wealth diverge sharply from those in income. We seek to pave the way for new explanations of cross-national differences in wealth inequality by tracing them to the influence of different wealth components. Drawing on the literatures on financialization and housing, we argue that housing equity should be the central building block of the comparative analysis of wealth inequality. Using harmonized data on 15 countries included in the Luxembourg Wealth Study (LWS), we demonstrate a lack of association between national levels of income and wealth inequality and concentration. Using decomposition approaches, we then estimate the degree to which national levels of wealth inequality and concentration relate to cross-national differences in wealth portfolios and the distribution of specific asset components. Considering the role of housing equity, financial assets, non-housing real assets, and non-housing debt, we show that cross-national variation in wealth inequality and concentration is centrally determined by the distribution of housing equity.

Item Type: Article
Additional Information: Funding Information: The research leading to these results has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 730998, InGRID-2 – Integrating Research Infrastructure for European expertise on Inclusive Growth from data to policy. A replication file for all analyses reported in this article is available at https://osf.io/ayvg4/ . Funding Information: Earlier versions of this manuscript were presented at meetings of the American Sociological Association (2020), the Society for the Advancement of Socio-Economics (2020), the Research Committee on Social Stratification and Mobility RC28 Frankfurt (2019), the German Sociological Association (2018), and the European Consortium for Sociological Research (2018); at workshops at the University of Helsinki (2019) and Dauphine University (2019); and at talks at the University of Oxford (2020) and London School of Economics (2020). The research leading to these results has received funding from the European Union?s Horizon 2020 research and innovation programme under grant agreement No. 730998, InGRID-2 ? Integrating Research Infrastructure for European expertise on Inclusive Growth from data to policy. A replication file for all analyses reported in this article is available at https://osf.io/ayvg4/. Publisher Copyright: © American Sociological Association 2021.
Divisions: International Inequalities Institute
Date Deposited: 07 May 2024 11:27
Last Modified: 19 Jul 2024 21:27
URI: http://eprints.lse.ac.uk/id/eprint/122947

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