Where Does Wealth Come From? Measuring Lifetime Resources in Norway
AbstractIn this paper, we use comprehensive administrative data on the population of Norway to create a measure of lifetime resources, which generates several stylized facts. First, lifetime resources are highly correlated with net wealth, but net wealth is more unequally distributed. Second, labor income is the most important component of lifetime resources, except among the top 1 percent where capital income and capital gains on financial assets become important. Lastly, lifetime resources are a better predictor of child human capital outcomes than net wealth, suggesting that, in some cases, inequality in lifetime resources may be more relevant than inequality in wealth.
CitationBlack, Sandra E., Paul J. Devereux, Fanny Landaud, and Kjell G. Salvanes. 2023. "Where Does Wealth Come From? Measuring Lifetime Resources in Norway." Journal of Economic Perspectives, 37 (4): 115-36. DOI: 10.1257/jep.37.4.115
- D15 Intertemporal Household Choice; Life Cycle Models and Saving
- D31 Personal Income, Wealth, and Their Distributions
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials