The ranks of very most wealthy people in the U.S. show considerable churn, but remain highly biased in favor of the descendants of previous members of its ranks.
Is the top tail of wealth a set of fixed individuals or is there substantial turnover? We estimate upper-tail wealth dynamics during the Gilded Age and beyond, a time of rapid wealth accumulation and concentration in the late 19th and early 20th centuries. Using various wealth proxies and data tracking tens of millions of individuals, we find that most extremely wealthy individuals drop out of the top tail within their lifetimes. Yet, elite wealth still matters. We find a non-linear association between grandparental wealth and being in the top 1%, such that having a rich grandparent exponentially increases the likelihood of reaching the top 1%. Still, over 90% of the grandchildren of top 1% wealth grandfathers did not achieve that level.
1 comment:
I'm struggling to conceive a broad takeaway or generalization for this. That there is significant churn/turnover in what is by definition a very small population group, acting in a system designed to be competitive (not fair, just competitive) - ok, we can now see in data what we should have assumed anyway. The authors even state they aren't trying to explain the churn, just measure it. I don't see what is interesting that there is a small fraction of the population that is well-off. It's actually impossible that there isn't such a fraction. The problem, the interesting phenomenon that needs to be studied (and hopefully solved) is that that tiny fraction of the population has to continually increase its massive fraction of the total wealth.
I'm sorry I don't intend to criticize posting the article. But is there supposed to be more value to this, than just measuring the rates of change? Given my own bias, it's hard not to read the paper as bureaucratic apologia (maybe a wise direction given the incoming administration).
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