Wealth Dynamics in the 1980’s and 1990’s: Sweden and the U.S
AbstractGiven differences in public saving programs between Sweden and the United States, an examination of household private wealth accumulation in these two countries can be enlightening. In this paper we examine wealth inequality and mobility in Sweden and the United States over the past decade. We show that wealth inequality has been significantly greater in the U.S. than in Sweden and, while remaining relatively constant since the mid-1980’s in Sweden, has increased in the United States. In addition to less inequality and a higher median wealth, we also show that wealth quintile mobility in the 1990’s has been 25.7% higher in Sweden, as measured by Shorrocks’ index. Noting the role of various demographic components in shaping the patterns of wealth mobility as well as the importance of the initial wealth distribution, we utilize a matching algorithm that controls for these differences. Matching on the initial wealth distribution alone accounts for most of the mobility difference between the two countries and yields a Shorrocks’ index in the U.S. 11.1% less than that in Sweden. Adjusting for the large degree of imputation in the Swedish data, the U.S. index is only 3.4% to 6.1% less than that of Sweden. Along with exploring the role of racial composition differences, we conclude tha demographic variation between Sweden and the U.S. play very little role in explaining wealth mobility beyond that explained by the initial wealth distribution. Despite the higher quintile mobility in Sweden, dollar mobility is still high in the United States.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2000:18.
Length: 39 pages
Date of creation: 01 Nov 2000
Date of revision:
Publication status: Published in Journal of Human Resources, 2003, pages 322-353.
Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
Mobility; Wealth; Panel data; Statistical matching; Comparison U.S. - Sweden;
Other versions of this item:
- Klevmarken, A. & Lupton, J. & Stafford, F., 2000. "Wealth Dynamics in the 1980' and 1990's: Sweden and the U.S," Papers 2000-18, Uppsala - Working Paper Series.
- Klevmarken, A. & Lupton, J. & Stafford, F., 2000. "Wealth Dynamics in the 1980' and 1990's: Sweden and the U.S," Papers 2000:18, Uppsala - Working Paper Series.
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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