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Wealth Inequality in Sweden: What Can We Learn from Capitalized Income Tax Data?

Author

Listed:
  • Lundberg, Jacob

    (Uppsala University)

  • Waldenström, Daniel

    (Research Institute of Industrial Economics, Stockholm)

Abstract

This paper presents new estimates of wealth inequality in Sweden during 2000–2012, linking wealth register data up to 2007 and individually capitalized wealth based on income and property tax registers for the period thereafter when a repeal of the wealth tax stopped the collection of individual wealth statistics. We find that wealth inequality increased after 2007 and that more unequal bank holdings and apartment ownership appear to be important drivers. We also evaluate the performance of the capitalization method by contrasting its estimates and their dispersion with observed stocks in register data up to 2007. The goodness-of-fit varies tremendously across assets and we conclude that although capitalized wealth estimates may well approximate overall inequality levels and trends, they are highly sensitive to assumptions and the quality of the underlying data sources.

Suggested Citation

  • Lundberg, Jacob & Waldenström, Daniel, 2016. "Wealth Inequality in Sweden: What Can We Learn from Capitalized Income Tax Data?," IZA Discussion Papers 9902, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9902
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    References listed on IDEAS

    as
    1. Daniel Waldenström, 2016. "The national wealth of Sweden, 1810--2014," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 64(1), pages 36-54, March.
    2. Jesper Roine & Daniel Waldenström, 2009. "Wealth Concentration over the Path of Development: Sweden, 1873–2006," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(1), pages 151-187, March.
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    6. Jesse Bricker & Alice Henriques & Jacob Krimmel & John Sabelhaus, 2016. "Measuring Income and Wealth at the Top Using Administrative and Survey Data," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 261-331.
    7. Kopczuk, Wojciech & Saez, Emmanuel, 2004. "Top Wealth Shares in the United States, 1916-2000: Evidence From Estate Tax Returns," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(2), pages 445-487, June.
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    11. Edward Wolff, 2013. "The Asset Price Meltdown, Rising Leverage, and the Wealth of the Middle Class," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(2), pages 333-342.
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    More about this item

    Keywords

    Gini co-efficient; wealth distribution; capitalization method; investment income method; top wealth shares; Great Recession;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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