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  3. Journal of Economic Literature
  4. December 2018
  5. Skewed Wealth Distributions: Theory and Empirics

Skewed Wealth Distributions: Theory and Empirics

  • Jess Benhabib
  • Alberto Bisin
Journal of Economic Literature
vol. 56, no. 4, December 2018
(pp. 1261-91)
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Abstract

Invariably across a cross-section of countries and time periods, wealth distributions are skewed to the right displaying thick upper tails, that is, large and slowly declining top wealth shares. In this survey we categorize the theoretical studies on the distribution of wealth in terms of the underlying economic mechanisms generating skewness and thick tails. Further, we show how these mechanisms can be micro-founded by the consumption-saving decisions of rational agents in specific economic and demographic environments. Finally we map the large empirical work on the wealth distribution to its theoretical underpinnings.

Citation

Benhabib, Jess, and Alberto Bisin. 2018. "Skewed Wealth Distributions: Theory and Empirics." Journal of Economic Literature, 56 (4): 1261-91. DOI: 10.1257/jel.20161390

Additional Materials

JEL Classification

  • C46 Specific Distributions; Specific Statistics
  • D14 Household Saving; Personal Finance
  • D31 Personal Income, Wealth, and Their Distributions
  • E21 Macroeconomics: Consumption; Saving; Wealth
  • J31 Wage Level and Structure; Wage Differentials