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Wealth inequality and household structure: US vs. Spain

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  • Olympia Bover

    ()
    (Banco de España)

Abstract

We study the link between culturally inherited household structure and wealth distribution in international comparisons using household data for the US and Spain (the SCF and the EFF). We estimate counterfactual US distributions relying on the Spanish household structure. Our results show that differences in household structure account for most of the differences in the lower part of the distribution between the two countries, but mask even larger differences in the upper part of the distribution. Imposing the Spanish household structure to the US wealth distribution has little effect on summary measures of inequality. However, this is the net result of reduced differences at the bottom and increased differences at the top. So there is distinct additional information in considering the whole distribution. We also report some evidence of an association between these wealth distribution differences and wealth composition. Finally, we present results for the within-group differences between the two countries using quantile regressions and find a reversing pattern by age.

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File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/08/Fic/dt0804e.pdf
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Bibliographic Info

Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0804.

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Length: 46 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:bde:wpaper:0804

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Keywords: Household structure; wealth distribution; international comparisons;

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  1. Cagetti, Marco & De Nardi, Mariacristina, 2008. "Wealth Inequality: Data And Models," Macroeconomic Dynamics, Cambridge University Press, vol. 12(S2), pages 285-313, September.
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  4. Mariacristina De Nardi, 2004. "Wealth Inequality and Intergenerational Links," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 743-768.
  5. Eva Sierminska & Andrea Brandolini & Timothy M Smeeding, 2007. "Comparing wealth distribution across rich countries: the Luxembourg Wealth Study project," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Proceedings of the IFC Conference on "Measuring the financial position of the household sector", Basel, 30-31 August 2006 - Volume 1, volume 25, pages 297-310 Bank for International Settlements.
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  7. James B. Davies & Anthony Shorrocks & Edward N. Wolff, 2010. "The World Distribution of Household Wealth," Working Papers id:3217, eSocialSciences.
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  10. Cowell, Frank A. & Flachaire, Emmanuel, 2007. "Income distribution and inequality measurement: The problem of extreme values," Journal of Econometrics, Elsevier, vol. 141(2), pages 1044-1072, December.
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  12. Dean R. Hyslop & David C. Maré, 2005. "Understanding New Zealand's Changing Income Distribution, 1983-1998: A Semi-parametric Analysis," Economica, London School of Economics and Political Science, vol. 72(3), pages 469-495, 08.
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Cited by:
  1. Andreas Peichl & Nico Pestel & Hilmar Schneider, 2012. "Does Size Matter? The Impact Of Changes In Household Structure On Income Distribution In Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(1), pages 118-141, 03.
  2. Thomas Y. Mathä & Alessandro Porpiglia & Eva Sierminska, 2011. "The Immigrant/Native Wealth Gap in Germany, Italy and Luxembourg," BCL working papers 57, Central Bank of Luxembourg.
  3. Josep Pijoan-Mas & Virginia Sánchez-Marcos, 2009. "Spain Is Different: Falling Trends Of Inequeality," Working Papers wp2009_0910, CEMFI.
  4. Frank Cowell & Eleni Karagiannaki & Abigail McKnight, 2013. "Accounting for cross-country differences in wealth inequality," LSE Research Online Documents on Economics 51283, London School of Economics and Political Science, LSE Library.
  5. Frank Cowell & Karagiannaki, E. & Abigail Mcknight, 2013. "GINI DP 72: Accounting for cross-country differences in wealth inequality," GINI Discussion Papers 72, AIAS, Amsterdam Institute for Advanced Labour Studies.
  6. repec:cep:sticas:case168 is not listed on IDEAS
  7. Francisco Azpitarte, 2010. "Measuring poverty using both income and wealth: A cross-country comparison between the U.S. and Spain," Working Papers 153, ECINEQ, Society for the Study of Economic Inequality.
  8. Masood, Sarwar Awan & Muhammad, Waqas & Amir, Aslam, 2012. "Multidimensional Measurement of Poverty in Pakistan," MPRA Paper 41532, University Library of Munich, Germany.
  9. Francisco Azpitarte, 2010. "The household wealth distribution in Spain: The role of housing and financial wealth," Hacienda Pública Española, IEF, vol. 194(3), pages 65-90, October.
  10. Ada Ferrer-i-carbonell & X. Ramos & M. Oviedo, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Spain," GINI Country Reports spain, AIAS, Amsterdam Institute for Advanced Labour Studies.

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