Presentation by: Facundo Alvaredo (Paris School of Economics) OECD Conference on wealth inequalities: Measurement and policies Paris, 26 April 2018.

1. The distribution of wealth
Evidence from five data sources
Facundo Alvaredo
Paris School of Economics & EEG Oxford & CONICET
OECD
Conference on wealth inequalities: Measurement and policies
26 April 2018

2. The distribution of personal wealth is receiving a great
deal of attention…
…after being neglected for many years
• US (Kopczuk-Saez, 2004; Saez-Zucman, 2016)
• France (Garbinti-Goupille-Piketty, 2017)
• UK (Alvaredo-Atkinson-Morelli, 2017, 2018)
• Spain (Alvaredo-Saez, 2010; Martínez Toledano, 2018; Alvaredo-Artola, 2018)
• Italy (Acciari, Alvaredo, Morelli, in progress)
• Denmark, Belgium, Germany, Sweden, Switzerland
• Credit Suisse (Shorrocks and Davis), Allianz, Merrill Lynch, UBS,… reports
• ECB/ONS/FRB wealth surveys and related papers and reports
• OECD Guidelines for Micro Statistics on Household Wealth and Database
• LWS
• Etc…

3. Five potential sources of evidence
1.Multiplied-up inheritance data “Estate Multiplier Method”
2.Household surveys
3.Registers or tabulations from wealth tax
4.Multiplied-up capital incomes “Capitalization Method”
5.Rich Lists (Forbes, Sunday Times; “undisclosed” methods)
• [Census data]
• Combination of sources “Hybrid methods”

4. Sources of evidence about the distribution of personal wealth
Potential sources UK US France Italy Spain
1. Household
surveys
✔
1950s. WAS
since 2006
✔
1960s. SCF
since 1983
✔
Enquête
Patrimoine
Since 1986
✔
SHIW
✔
EFF since
2002
2. Estates
✔
Since 1895
✔
Since 1916
✔
Very scattered
✔
1995-2016
✖
1901-1960
3. Capital incomes
from income tax
✔
higher level of
detail desired
✔ ✔ ✖
Not public
✔
Since 1982
4. Registers from
wealth tax
✖ ✖
✔
Irregular from
1982
✖ ✔
Since 1981
5. Rich lists
✔
ST since 1989
Forbes
✔
Forbes since
1982
✔
Forbes
Challenges
✔
Forbes
✔
Forbes
El Mundo

5. Definitions are important, but often ignored
Definitions
Unit of analysis:
individual (estates)
tax unit (some income tax data)
household (survey data)
extended family (rich lists).
Valuation:
realisation (market) value
going concern value
Geographical coverage:
domicile
residence
presence.

6. UK: Top 10% and bottom 90% wealth share since 1895 (inheritance)
Average wealth of
Top 10%: 530 000 £
P90: 215 000 £
Average wealth of
Bottom 90%: 50 000 £

7. UK: Top 1% wealth share since 1895 (inheritance data)
0
10
20
30
40
50
60
70
80
1895
1905
1915
1925
1935
1945
1955
1965
1975
1985
1995
2005
2015
Shareoftotalpersonalwealth%
Wealth

8. UK: Top 1% wealth share since 1895 (inheritance data)
0
10
20
30
40
50
60
70
1895
1905
1915
1925
1935
1945
1955
1965
1975
1985
1995
2005
2015
Shareoftotalpersonalwealth%
Top 0.5%
Top 1-0.5%

9. UK: Top 1% wealth share: the role of housing assets
0
10
20
30
40
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Shareoftotalpersonalwealth%
total wealth
wealth excluding housing

10. France: Wealth shares 1800-2015 (hybrid)
ealth, it is interesting to note that ealth from around 700% to less than 200%—as
0%
20%
40%
60%
80%
100%
90%
70%
50%
30%
10%
20001980196019401920190018801860184018201800
Shareofpersonalwealth(%)
In , the share o personal ealth held by the op in rance as All values have been converted to constant euros accounting or inflation or
comparison, €1 = $1.1 = ¥7.3 at market exchange rates.
Top 10%
Bottom 50%
Average net wealth
per adult :
€200 800
- :
the fall of the "upper class",
the rise of the "middle class"
ource: Garbinti, Goupille-Lebret and i etty ee ir id orld or data series and notes
€25 500
€192 000
€1 096 000
Middle 40%
Figure 4.4.1
Wealth shares in France, 1800–2014
trends in Global Wealth inequality Part Iv

11. France: Asset composition by wealth groups, 2012 (capitalization)
In 2012, 67% of the personal wealth of the 5th decile (p50-p60) was composed of housing assets (net of debt). All values have been converted to 2016 constant
euros accounting or inflation or comparison, at mar et e change rates
0%
10%
20%
40%
50%
60%
70%
80%
90%
100%
99.9-100
99.5-99.9
99-99.5
95-99
90-95
80-90
70-80
60-70
50-60
40-50
-
-
10-20
0-10
Shareofpersonalwealthportfolio(%)
Wealth group (percentile)
Financial assets (excl. deposits)
Business assets
Deposits
Housing (net of debt)
ource: Garbinti, Goupille-Lebret and i etty ee ir id orld or data series and notes
Figure 4.4.4
asset composition by wealth group in France, 2012

12. Spain: Wealth shares 1984-2015 (capitalization)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
201220102008200620042002200019981996199419921990198819861984
Shareofhouseholdwealth(%)
In , the Bottom share o household ealth in pain as All values have been converted to constant euros accounting or inflation or
comparison, €1 = $1.1 = ¥7.3 at market exchange rates.
Top 10%
Bottom 50%
Middle 40%
€813 330
€132 700
€18 890
Average net wealth
per adult :
€143 880
ource: Mart ne - oledano ee ir id orld or data series and notes
Figure 4.5.2
Wealth shares in spain, 1984–2013
trends in Global Wealth inequality Part Iv

13. Spain: Asset composition by wealth groups, 2013 (capitalization)
In 2013, 93% of the household wealth of the 5th decile (p50-p60) was composed of housing assets (net of debt).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
99.9-P100
99.5-99.9
99-99.5
95-99
90-95
80-90
70-80
60-70
50-60
40-50
30-40
20-30
10-20
0-10
Shareofhouseholdwealth(%)
Wealth group (percentile)
Financial assets
Unincorporated
business assets
Housing (net of debt)
Source: Martínez-Toledano (2017). See wir2018.wid.world for data series and notes.
Figure 4.5.3
asset composition by wealth group in spain, 2013
Part Iv trends in Global Wealth inequality

14. Italy: Wealth shares 1995-2016 (inheritance)
The Graduate Center - CUNY Salvatore Morelli – 12 Apr 2018
Top1% from tax records and household survey
024681012141618202224262830
%ofNationalPersonalWealth
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
year
range of values DINA - main series
H survey (equal-split & no durab) H survey (Brandolini, 2014)
Wealth Concentration - Top1% in Italy : 1995 -2016
Source: Brandolini (2014) from household survey (SHIW): net equivalent wealth. Note:
External totals refer to the total personal wealth from the NA and the total adult population

15. US: Top 1% wealth share in comparative perspective
mar et, and by , o urban housing in China and from 39% to 25% over the same
0%
10%
20%
30%
40%
50%
60%
70%
80%
2010200019901980197019601950194019301920
Shareofpersonalwealth(%)
In 2015, the Top 1% wealth share was 43% in Russia against 22% in 1995.
Source: WID.world (2017). See wir2018.wid.world for data series and notes.
UK
China
France
Russia
US
Figure 4.2.1
top 1% personal wealth share in emerging and rich countries, 1913–2015
trends in Global Wealth inequality Part Iv

16. The top 1% and bottom 75% shares of global wealth in
China-US-Europe
o the di erent ealth groups bet een
and all gro th rates are e pressed in
world,then billionaireswould ultimatelycome
to own 100% of the world’s wealth.
5%
10%
15%
20%
25%
30%
35%
40%
20152010200520001995199019851980
Shareofglobalwealth(%)
In 2016, 33% of global wealth was owned by the Top 1%. The evolution of global wealth groups from 1980 to 2017 is represented by China, Europe and the US.
Source: WID.world (2017). See wir2018.wid.world for data series and notes.
Bottom 75%
wealth share
Top 1%
wealth share
Figure 4.1.1
top 1% and bottom 75% shares of global wealth, 1980–2017: China, europe and the us

17. Final remarks
• For most of the countries (but not all) for which we have data, wealth
inequality has been on the rise since the 1980s
• Increasing income inequality and transfer of public wealth to private holders
have played a key role
• In France and the UK, the increase in wealth concentration has been more
moderate due to the equalizing effect of rising housing prices
• In the US (where the housing wealth effect has been smaller), the inequality
of saving rates seems to be a major driver of the increase in wealth
concentration
• The relative position US/Europe reversed in the 1970s
• Wealth surveys in the developing world: what to do and how to move
forwards?