Financialization and Income Generation in the 21st Century: Rise of the Petit Rentier Class?

This article considers the consequences of asset-based accumulation for household income factors and social class structure in twenty-nine countries from 1998-2016. Are financialization, asset-based welfare institutions, and rising real estate returns fueling a growing class of petit rentiers in capitalist economies? That is, households who accrue more than a trivial share of income from capital rather than labor or government transfers. The analysis draws on the Luxembourg Income Study data. Contrary to expectations, most countries saw declines in the share of households who accrue more than 10%, or 20% of income from assets. Estimates from correlated random effects models indicate that financialization is associated with between-country differences in the size of the petit rentier, but not within-country change over time. The decline of the petit rentier can be partly explained by declining interest rates, which reduces income from bank savings.