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Homoploutia: top labor and capital incomes in the United States, 1950–2020

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  • Berman, Yonatan
  • Milanovic, Branko

Abstract

Homoploutia describes the situation in which the same people are rich in the space of capital and labor income. We combine survey and administrative data to document the evolution of homoploutia in the United States since 1950. In 1950, 10 percent of top decile capital-income earners were also in the top decile of labor income. Today, this indicator is 30 percent. This makes the traditional division to capitalists and laborers less relevant today. We find that the increase in homoploutia accounts for 20 percent of the increase in interpersonal income inequality since 1986.

Suggested Citation

  • Berman, Yonatan & Milanovic, Branko, 2023. "Homoploutia: top labor and capital incomes in the United States, 1950–2020," LSE Research Online Documents on Economics 123639, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:123639
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    Cited by:

    1. Ranaldi, Marco & Milanović, Branko, 2022. "Capitalist systems and income inequality," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 20-32.
    2. David Gallusser & Matthias Krapf, 2022. "Joint Income-Wealth Inequality: Evidence from Lucerne Tax Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(1), pages 251-295, August.
    3. Petrova, Bilyana & Ranaldi, Marco, 2021. "Determinants of Income Composition Inequality," SocArXiv vyrz7, Center for Open Science.
    4. Jordan Rosenblum, 2024. "Politics, markets, and CEO pay: a congruence analysis of two competing theoretical explanations of executive compensation at large firms in Finland," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(1), pages 413-444, February.
    5. Ranaldi, Marco, 2021. "Global Distributions of Capital and Labor Incomes: Capitalization of the Global Middle Class," SocArXiv 3g59r, Center for Open Science.
    6. Mattauch, Linus & Klenert, David & Stiglitz, Joseph E. & Edenhofer, Ottmar, 2022. "Overcoming wealth inequality by capital taxes that finance public investment," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 383-395.
    7. Petar Peshev & Kristina Stefanova & Ivanina Mancheva, 2023. "Wealth Inequality Determinants in the EU Members from the CEE Region, 1995-2021," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 19-40.
    8. Rachel Ong ViforJ & William A.V. Clark & Susan J. Smith & Gavin A. Wood & William Lisowski & N.T. Khuong Truong & Melek Cigdem, 2021. "Tenure transitions at the edges of ownership: Reinforcing or challenging the status quo?," Environment and Planning A, , vol. 53(8), pages 1993-2011, November.

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    More about this item

    Keywords

    political economy; homoploutia; income inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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