The effect of privatization on wealth distribution in Russia

The paper considers the Russian privatization process and examines how its deviation from the competitive sale standard was likely to affect wealth inequality. (Privatization here is defined narrowly as the transfer of existing assets from government ownership to private hands.) While empirical evaluation is all but impossible due to the dearth of reliable data, it is feasible to analyze the institutional features of Russian privatization in terms of their effect on redistribution of wealth. The paper argues that the most relevant and interesting issue is to evaluate privatization's distributional consequences relative to the informal pre-reform property rights. In light of this, privatization is modelled as a rent-seeking contest with incumbency advantage of enterprise managers who initially held the greatest informal rights over assets. The rent-seeking contest is shown to strongly magnify this pre-reform wealth inequality reflected in the incumbency advantage.
In addition, the paper analyzes the distributional consequences for various wealth groups of the differences in the composition of their pre-reform informal wealth, most importantly a relatively large share of housing assets in the wealth of the poor. The effect of wealth redistribution on economic growth in Russia is also discussed.     

Intergenerational Wealth Mobility in France, 19th and 20th Century

This paper examines intergenerational wealth mobility between fathers and children in France between 1848 and 1960. Considering wealth mobility in the long run requires taking into account not only positional mobility (that is, how families move within a given distribution of wealth), but also structural mobility induced by changes in the distribution of wealth. Such changes are related to two structural phenomena: in the nineteenth century, the rising number of individuals leaving no estate at death and, after World War I, the decline in the number of the very rich who could live off their wealth. The paper studies the movements between these groups and estimates the intergenerational elasticity of wealth, taking into account the persistence at the bottom and at the top.     

Status Preference, Wealth and Dynamics in the Open Economy

Abstract. The implications of status preference in a simple open economy model are investigated in this paper. The open economy is modeled as a continuum of identical representative agents who have preferences over consumption and status. In the paper status is identified as relative wealth, which takes the form of relative holdings international financial assets. A symmetric macroeconomic equilibrium is derived in which status is the source of transitional dynamics for domestic consumption and the current account balance. This result illustrates another way to combine transitional dynamics with interior equilibria in the small open economy Ramsey model with perfect capital mobility. We also show that status preference plays a critical role in influencing the open economy's adjustment to government expenditure and world interest rate shocks.     

ON THE WEALTH DYNAMICS OF SWEDISH FAMILIES, 1984–98

This paper focuses on three issues. First, it analyzes the increasing inequality of wealth in Sweden in terms of percentile age and birth cohort differences, and finds very weak evidence of life-cycle savings. There are rather strong birth cohort differences in wealth accumulation. Second, it is shown that bequests and inter vivo gifts contribute to the age and cohort differences in wealth, but do not increase the inequality of wealth. The third theme is mobility of wealth as a function of bequests, age, period, length of the transition period, and the magnitude of quantile differences.     

Wealth Inequality in Sweden: What can we Learn from Capitalized Income Tax Data?

This paper presents new estimates of wealth inequality in Sweden during 2000–2012, linking wealth register data up to 2007 and individually capitalized wealth based on income and property tax registers for the period thereafter when a repeal of the wealth tax stopped the collection of individual wealth statistics. We find that wealth inequality increased after 2007 and that more unequal bank holdings and housing appear to be important drivers. We also evaluate the performance of the capitalization method by contrasting its estimates and their dispersion with observed stocks in register data up to 2007. The goodness‐of‐fit varies tremendously across assets and we conclude that although capitalized wealth estimates may well approximate overall inequality levels and trends, they are highly sensitive to assumptions and the quality of the underlying data sources.     

数字普惠金融与中国农村家庭财富差距

促进农民增收致富和推动乡村振兴是二十大关注的重要问题。本文使用中国家庭金融调查数据和数字普惠金融指数,用分位回归方法分析了数字普惠金融对中国农村家庭财富差距的影响。结果发现：数字普惠金融可以显著提高农村家庭财富,有助于缩小家庭财富差距。随着家庭财富由低到高,数字普惠金融对于农村不同财富家庭总资产的正向影响由大到小。由于不同财富家庭的负债结构差异较大,随着财富由低到高,数字普惠金融对家庭净资产的影响则由小到大。夏普里值分解结果表明,数字普惠金融对农村家庭财富差距的贡献度近三分之一。异质性分析表明,数字普惠金融发展对于低收入家庭和低教育水平家庭财富的正向作用更强,进一步证明了上述结论。机制分析表明,数字普惠金融能显著促进农村家庭特别是低财富家庭的创业行为,而创业对于最低财富组家庭资产的正向刺激作用最强;受流动性约束可能性越大的低财富家庭,越能从数字普惠金融的发展中获益。因而进一步证实数字普惠金融可以缩小农村家庭财富差距。本文的研究说明,发展数字普惠金融对于探索农民致富路径和推进乡村振兴有积极作用。     

The Elephant In The Ground: Managing Oil And Sovereign Wealth

One of the most important developments in international finance and resource economics in the past twenty years is the rapid and widespread emergence of the $6 trillion sovereign wealth fund industry. Oil exporters typically ignore below-ground assets when allocating these funds, and ignore above-ground assets when extracting oil. We present a unified stylized framework for considering both. Subsoil oil should alter a fund’s portfolio through additional leverage and hedging. First-best spending should be a share of total wealth, and any unhedgeable volatility must be managed by precautionary savings. If oil prices are pro-cyclical, oil should be extracted faster than the Hotelling rule to generate a risk premium on oil wealth. Finally, we discuss how our analysis could improve the management of Norway’s fund in practice.     

国债融资能否影响居民消费需求——基于城镇居民经验数据的实证分析

“传统的政府债务观点”与“李嘉图等价观点”对国债融资的消费效应存在很大的争议.本文基于生命周期假说,将国债幻觉引入基本消费函数,区分私人部门持有的国债资产和其他资产两部分,运用中国宏观经济数据实证分析了国债对城镇居民消费的影响.实证结果表明:国债对城镇居民具有一定的“财富效应”;人均可支配收入仍是居民消费的基础;其他金融资产对城镇居民具有“负”的财富效应,而住房资产对城镇居民而言具有“正”的财富效应.     

TRENDS IN AGGREGATE HOUSEHOLD WEALTH IN THE US., 1900–83

New estimates of aggregate household wealth for the U S. covering selected years in the period from 1900 to 1983 are presented. I find that marketable wealth per capita grew at 1.46 percent per year in real terms over the 1900–83 period, while real wealth per household grew at 0.81 percent per year. However, the growth rate was not uniform over the period, with the rates high during the 1900–29 and the 1949–69 periods, and slow during the other years. Moreover, real per capita wealth actually increased more slowly than real per capita disposable income and real per capita GNP over the century. I also find dramatic changes in the composition of household wealth over the century. In particular, both tangibles and fixed claim assets increased relative to total assets over the period from 1900 to 1983, while equities fell from about half to a quarter. Owner-occupied housing increased only moderately as a proportion of assets, from 17 percent in 1900 to 20 percent in 1983. Unincorporated business equity fell from over a third of total assets to 12 percent. Among financial assets, the biggest relative growth occurred in deposits in financial institutions, which grew from 8 percent in 1900 to 22 percent in 1983. Corporate stock had the most volatile behavior in the household portfolio, growing from 13 percent of total assets in 1900 to 27 percent in 1929, falling to 10 percent in 1949, rising to 22 percent in 1965, and then falling to 11 percent by 1983. Debt as a proportion of total assets rose from 5 percent in 1900 to 16 percent in 1983. Finally, both pension reserves and social security wealth increased relative to marketable assets from virtually zero in 1900 to 12 and 48 percent, respectively.     

INTERNATIONAL COMPARISONS OF WEALTH INEQUALITY

This study presents reasonably comparable estimates of the size distribution of household or personal wealth for eight OECD countries—Australia, Canada, France, Germany, Japan, Sweden, the United Kingdom, and the United States. In the mid-1980s, the U.S. ranked as the most unequal and Japan the least, while the other six countries had roughly comparable levels of wealth inequality. Moreover, while wealth inequality rose sharply in the U.S. during the 1980s, it increased modestly in Sweden and showed little change or a slight decline in Canada, France, and the U.K. A comparison of time trends for the U.K. and the U.S. suggests that the relatively high wealth inequality in the U.S. in the 1980s represents a marked turnaround from the 1950s, when the U.S. was considerably more equal in terms of wealth ownership than the U.K. Comparative results for the two countries hold for both conventional (marketable) wealth and for augmented wealth, which includes a valuation of public and private pension wealth.     

Women's Wealth and Intimate Partner Violence: Insights from Ecuador and Ghana

Intimate partner violence (IPV) by men against their partners is one of the most glaring indicators of women's lack of empowerment. Drawing upon the 2010 Ecuador Household Asset Survey (EAFF) and the 2010 Ghana Household Asset Survey (GHAS), nationally representative surveys for Ecuador and Ghana, respectively, this study investigates the relationship between women's ownership of assets and physical and emotional abuse by spouses against currently partnered women over the previous twelve months. It uses the value of a woman's total assets compared to those of her partner as the main proxy for a woman's bargaining power. Differentiating between physical and emotional violence in both countries, the study finds that women's share of couple wealth is significantly associated with lower odds of physical violence in Ecuador and emotional violence in Ghana. Moreover, the association between women's share of couple wealth and IPV is contingent on the household's position in the wealth distribution.     

Precautionary Saving,Financial Risk,and Portfolio Choice

Relying on a direct question about the desired amount of precautionary wealth from the 2002 wave of the Italian “Survey of Household Income and Wealth,” I assess the main determinants of the precautionary motive for saving, focusing on the role played by financial risk on households' saving decisions. Households that invest mainly in safe assets do not need to protect themselves against future and unexpected financial losses. Consequently, once we control for households' sources of risk beside financial ones, the amount of precautionary savings of a household investing exclusively in safe assets should be lower compared to households who detain a non‐negligible share of risky assets in their portfolio. Results show that, as expected, a strong and negative correlation exists between the desired amount of precautionary wealth and the ownership of a portfolio made exclusively of safe assets.     

Increasing returns to savings and wealth inequality

In this paper I present an explanation to the fact that in the data wealth is substantially more concentrated than income. Starting from the observation that the composition of households' portfolios changes towards a larger share of high-yield assets as the level of net worth increases, I first use data on historical asset returns and portfolio composition by wealth level to construct an empirical return function. I then augment an Overlapping Generation version of the standard neoclassical growth model with idiosyncratic labor income risk and missing insurance markets to allow for returns on savings to be increasing in the level of accumulated assets. The quantitative properties of the model are examined and show that an empirically plausible difference between the return faced by poor and wealthy agents is able to generate a substantial increase in wealth inequality compared to the basic model, enough to match the Gini index and all but the top 1 percentile of the US distribution of wealth.     

Intrahousehold moral hazard frictions and household poverty traps in rural India

We empirically study the role of assets held by women in the creation of household wealth using data from rural India. We design a streamlined model of intrahousehold project funding where moral hazard frictions between spouses and women's asset control are the main ingredients. As predicted by the model, the data show that household asset accumulation depends on women's asset control in a non-monotonic way. Results indicate no presence of multiple equilibrium poverty traps, but do show that exogenous negative shocks will trigger assets aggregation within households where both spouses are present. This resilience mechanism is, however, not found in female headed household as these households have a monotonic relationship between women's wealth control and asset creation. We thus argue that policies to support women's empowerment need to distinguish women based on their individual wealth levels and headship status to enhance household well-being in remote Indian communities.     

Using sparse categorical principal components to estimate asset indices: new methods with an application to rural southeast asia

Asset indices have been used since the late 1990s to measure wealth in developing countries. We extend the standard methodology for estimating asset indices using principal component analysis in two ways: by introducing constraints that force the indices to have increasing value as the number of assets owned increases, and by estimating sparse indices with a few key assets. This is achieved by combining categorical and sparse principal component analysis. We also apply this methodology to the estimation of per capita level asset indices. Using household survey data from northwest Vietnam and northeast Laos, we show that the resulting asset indices improve the prediction and ranking of income both at household and per capita level.     

HOUSEHOLD SAVING AND PORTFOLIO CHANGE: EVIDENCE FROM THE 1983–89 SCF PANEL

There are few sources of high-quality data on the dynamics of wealth accumulation. This paper uses newly available data from the 1983 89 panel of the Survey of Consumer Finances to examine household saving and portfolio change over the 1980s. Our main findings are as follows. First, median household wealth rose modestly over the period. Second, while overall wealth inequality increased, households in the top 1 percent of the wealth distribution in 1983 saw their share of total wealth decline, probably reflecting turnover among the very wealthy. Third, although age, income, and initial wealth had significant effects in regressions on household saving, a large part of the variation in saving was unexplained. Finally, there were clear life-cycle patterns in the portfolios of assets and liabilities held by households, with younger households acquiring homes, businesses and all types of debts, and older households divesting themselves of these assets and debts.     

Life‐cycle asset accumulation and allocation in Canada

Abstract.  This paper documents the life‐cycle patterns of household portfolios in Canada, and investigates several hypotheses about asset accumulation and allocation. Inferences are drawn from the 1999 Survey of Financial Security, with some comparisons to earlier wealth surveys from 1977 and 1984. I find cross‐sectional evidence for asset decumulation at older ages when annuitized assets like pension wealth are included in the analysis. I also find that the portfolio share of financial assets increases sharply with age, while indicators of risk tolerance appear to decrease. This is consistent with families' desiring more liquid and less risky assets as they age. JEL classification: D31, E21, G11     

Will Self‐Managed Superannuation Fund Investors Survive?

The relative risk aversion coefficient that characterises the representative self‐managed superannuation fund (SMSF) investor reveals not only how much that investor dislikes risk but also other information about the investor's economic characteristics, including how his or her allocations to risky assets change as his or her wealth changes. Determination of the relative risk aversion coefficient for the average SMSF investor reveals a value of 5.05. This value is too high to be consistent with logarithmic utility. This is significant because it implies that SMSF investors may be too risk averse to maximise the expected growth rate of wealth share accumulation. We are left to consider a very important question: Will SMSF investors survive?     

Redistribution and persistent exploitation in an accumulation economy with decreasing marginal impatience

Abstract

A variant of John Roemer’s accumulation economy is studied in which agents have identical payoff functions characterized by decreasing marginal impatience (DMI), such that time discount rates are decreasing in individual wealth levels. The implications of DMI for the existence and persistence of positive rates of profit and exploitation in the presence of capital accumulation, as well as for the dynamic redistribution of wealth, are derived. It is demonstrated that with DMI, differential ownership of productive assets is sufficient to ensure ongoing capital scarcity, and thus persistently positive rates of return and exploitation, as well as eventual redistribution of productive assets to the wealthiest agents.