Top Incomes and National Savings
نویسندگان
چکیده
The relationship between income inequality and national savings is theoretically ambiguous, and past empirical studies have delivered mixed results. We revisit the question using a newly available source of data on inequality: the income share of the richest 10 percent and the richest 1 percent. Combining this with historical data on national savings rates, we are able to investigate the relationship for 11 developed countries over the period 1921–2002. We find no consistent relationship between lagged top income shares and current savings rates, and our standard errors are small enough that we are able to reject more than modest effects in either direction. We view this as suggesting that inequality at the top end of the distribution is not a major driver of national savings rates.
منابع مشابه
The Rise and Fall of Top Incomes in Iran 1985-2015
T his paper studies top income shares in Iran, using 26 Household Expenditure and Income Surveys conducted by the Statistical Center of Iran over the period 1985-2015. It is shown that after the imposed Iran-Iraq war, top income groups were raising their real income and income share by 2006; however, both their share and real income fell immediately after 2006 such that the numbers a...
متن کاملPreliminary SAVING AND REFERENCE GROUPS
I consider how the saving behavior of consumers is affected by incomes in their reference group. Although standard life cycle models with interdependent preferences provide no clear cut prediction of how incomes in one’s reference group should influence savings, the empirical analysis points to an unambiguously negative effect: If incomes in the reference group are higher, savings are lower. Th...
متن کاملVolatile Top Income Shares in Switzerland? Reassessing the Evolution Between 1981 and 2010∗
We study the recent evolution of top incomes in Switzerland, analyzing both social security data on labor incomes and tax data on total income. The results show that in the last 20 years, the share of top incomes has risen, and the top 0.01% share even doubled, putting Switzerland similar to European countries for the top 1% group but closer to the U.S. for higher top incomes. However, top inco...
متن کاملTrickle-down Consumption
Using state-level variation over time in the top deciles of the income distribution, we observe that nonrich households consume a larger share of their current income when exposed to higher top income levels. We argue that permanent income, wealth effects, or upward local price pressures cannot be the sole explanation for this finding. Instead, we show that the budget shares non-rich households...
متن کاملMarginal Tax Rates and Income: New Time Series Evidence∗
This paper estimates the dynamic effects of marginal tax rate changes on income reported on tax returns in the United States over the 1950-2010 period. After isolating exogenous variation in average marginal tax rates in structural vector autoregressions using a narrative identification approach, I find large positive effects in the top 1% of the income distribution. In contrast to earlier find...
متن کامل