Understanding 100 Years of the Evolution of Top Wealth Shares in the U.S.: What is the Role of Family Firms? / Andrew Atkeson, Magnus Irie.

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Atkeson, Andrew

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w27465.Publication details: Cambridge, Mass. National Bureau of Economic Research 2020.Description: 1 online resource: illustrations (black and white)Subject(s):

E21 - Consumption • Saving • Wealth

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Abstract: We use a simple random growth model to study the role of changing dynamics of family firms in shaping the evolution of top wealth shares in the United States over the course of the past century. Our model generates a time path for top wealth shares remarkably similar to those found by Saez and Zucman (2016) and Gomez (2019) when the volatility of idiosyncratic shocks to the value of family firms is similar to that found for public firms by Herskovic, Kelly, Lustig, and Van Nieuwerburgh (2016) over the past 100 years. We also show that consideration of family firms contributes not only to overall wealth inequality, but also to considerable upward and downward mobility of families within the distribution of wealth. We interpret our results as indicating that improving our understanding of the economics of the process by which families found new firms and then, eventually, diversify their wealth is central to improving our understanding of the distribution of great wealth and its evolution over time.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w27465 (Browse shelf(Opens below))	Not For Loan

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July 2020.

We use a simple random growth model to study the role of changing dynamics of family firms in shaping the evolution of top wealth shares in the United States over the course of the past century. Our model generates a time path for top wealth shares remarkably similar to those found by Saez and Zucman (2016) and Gomez (2019) when the volatility of idiosyncratic shocks to the value of family firms is similar to that found for public firms by Herskovic, Kelly, Lustig, and Van Nieuwerburgh (2016) over the past 100 years. We also show that consideration of family firms contributes not only to overall wealth inequality, but also to considerable upward and downward mobility of families within the distribution of wealth. We interpret our results as indicating that improving our understanding of the economics of the process by which families found new firms and then, eventually, diversify their wealth is central to improving our understanding of the distribution of great wealth and its evolution over time.