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New WP with @BrankoMilan is out!
What is homoploutia, how it evolved in the US since 1950 and how is it related to inequality?
Thread:
[1/6] https://twitter.com/BrankoMilan/status/1339956804604874752
New WP with @BrankoMilan is out!
What is homoploutia, how it evolved in the US since 1950 and how is it related to inequality?
Thread:
[1/6] https://twitter.com/BrankoMilan/status/1339956804604874752
Homoploutia is the situation where the same people (homo) are rich (ploutia) in terms of both labor and capital income. We measure it by the share of top decile capital-income earners who are also in the top decile of labor income.
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To cover a period of 70 years between 1950 to 2020 in the US we combine @lisdata, US distributional national accounts and early SCF data.
First finding: Homoploutia has increased considerably since 1950, from about 10% to 30%, most notably in the past 35 years.
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![To cover a period of 70 years between 1950 to 2020 in the US we combine @lisdata, US distributional national accounts and early SCF data.First finding: Homoploutia has increased considerably since 1950, from about 10% to 30%, most notably in the past 35 years.[3/6]](https://pbs.twimg.com/media/EpiOEK9XYAAmB2w.jpg "To cover a period of 70 years between 1950 to 2020 in the US we combine @lisdata, US distributional national accounts and early SCF data.First finding: Homoploutia has increased considerably since 1950, from about 10% to 30%, most notably in the past 35 years.[3/6]")
First finding: Homoploutia has increased considerably since 1950, from about 10% to 30%, most notably in the past 35 years.
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Second finding: The rising labor income inequality during the 1970s and 1980s fueled the increase in homoploutia. Either through higher saving leading to higher capital income, or higher incentives to participate in the labor force for the capital-income rich.
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Third finding: in turn, rising homoploutia acted to increase (total) income inequality, accounting to 2 percentage points (or 20%) of the rising top 10% income share from 1986 to 2020. It may have played a bigger role in increasing US inequality than the capital share.
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![Third finding: in turn, rising homoploutia acted to increase (total) income inequality, accounting to 2 percentage points (or 20%) of the rising top 10% income share from 1986 to 2020. It may have played a bigger role in increasing US inequality than the capital share.[5/6]](https://pbs.twimg.com/media/EpiO4pKWwAAsiAi.jpg "Third finding: in turn, rising homoploutia acted to increase (total) income inequality, accounting to 2 percentage points (or 20%) of the rising top 10% income share from 1986 to 2020. It may have played a bigger role in increasing US inequality than the capital share.[5/6]")
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