WEALTH INEQUALITY AND HOUSEHOLD STRUCTURE: U.S. VS. SPAIN

Authors

  • Olympia Bover

    Corresponding author
    1. Banco de España, IFS, IZA, and CEPR
      Olympia Bover, Research Division, Banco de España, Alcalá 48, 28014 Madrid, Spain (bover@bde.es).
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  • Note: I wish to thank Manuel Arellano, Tony Atkinson, Juan F. Jimeno, Ernesto Villanueva, and three anonymous referees for very useful comments and suggestions, and Miguel Ampudia for helping with the data.

Olympia Bover, Research Division, Banco de España, Alcalá 48, 28014 Madrid, Spain (bover@bde.es).

Abstract

We study the link between culturally inherited household structure and wealth distribution in international comparisons using household data for the U.S. and Spain (the SCF and the EFF). We estimate counterfactual U.S. distributions relying on the Spanish household structure. Our results show that differences in household structure account for most of the differences in the lower part of the distribution between the two countries, but mask even larger differences in the upper part of the distribution. Imposing the Spanish household structure to the U.S. wealth distribution has little effect on the Gini coefficient and wealth top shares. However, this is the net result of reduced differences at the bottom and increased differences at the top. So there is distinct additional information in considering the whole distribution. Finally, we present results for the within-group differences between the two countries using quantile regressions and find a reversing pattern by age.

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