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The determinants of wealth inequality in the UK, USA and France

The determinants of wealth inequality in the UK, USA and France

Tippet, Benjamin, Onaran, Özlem ORCID: 0000-0002-6345-9922 and Wildauer, Rafael ORCID: 0000-0001-6395-6286 (2021) The determinants of wealth inequality in the UK, USA and France. [Working Paper] (Unpublished)

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Abstract

This paper analyses the determinants of wealth inequality, measured as the share of wealth owned by the top 1% wealthiest individuals in the UK, the USA and France, using structural vector autoregression (SVAR) models for the periods of 1919-2014 and 1970-2014. We analyse the impact of technological change, globalisation, top marginal income and inheritance tax rates, labour's bargaining power, privatisation and homeownership on wealth inequality. Our results indicate that the only robust and significant determinant across all three countries is the bargaining power of labour – measured by union density in the UK and USA and collective bargaining coverage in France. We find that privatisation does significantly lead to higher top 1% wealth shares in the UK and France, although in the USA the effect is insignificant. Top marginal income tax rates lead to a decline in top wealth shares in the UK but are insignificant in the USA and France.

Item Type: Working Paper
Uncontrolled Keywords: JEL Codes: D31, J50, H24 Keywords: wealth inequality, income inequality, labour’s bargaining power, technological change, globalisation.
Subjects: H Social Sciences > HB Economic Theory
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA)
Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) > Greenwich Political Economy Research Centre (GPERC)
Last Modified: 08 Mar 2021 06:45
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
Selected for REF2021: None
URI: http://gala.gre.ac.uk/id/eprint/31260

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