Abstract
Comparative research on income inequality has produced several frameworks to study the institutional determinants of income stratification. In contrast, no such framework and much less empirical evidence exist to explain cross-national differences in wealth inequality. This situation is particularly lamentable as cross-national patterns of inequality in wealth diverge sharply from those in income. We seek to pave the way for new explanations of cross-national differences in wealth inequality by tracing them to the influence of different wealth components. Drawing on the literatures on financialization and housing, we argue that housing equity should be the central building block of the comparative analysis of wealth inequality. Using harmonized data on 15 countries included in the Luxembourg Wealth Study (LWS), we demonstrate a lack of association between national levels of income and wealth inequality and concentration. Using decomposition approaches, we then estimate the degree to which national levels of wealth inequality and concentration relate to cross-national differences in wealth portfolios and the distribution of specific asset components. Considering the role of housing equity, financial assets, non-housing real assets, and non-housing debt, we show that cross-national variation in wealth inequality and concentration is centrally determined by the distribution of housing equity.
Highlights
Cross-national differences in income inequality have been subject to decades of comparative empirical research (e.g., Smeeding et al 1990; Gottschalk and Smeeding 1997; Kenworthy 2004; Salverda et al 2009)
Comparing national levels of income inequality and wealth inequality based on gini coefficients in Figure 1a reveals the striking outlying position of the United States
This is no small task as cross-national differences in the distribution of housing equity themselves emerge from different processes besides just differences in home ownership rates: Housing equity is jointly and interactively determined by the structures and dynamics of housing markets and mortgage markets (Aalbers 2016; Blackwell and Kohl 2018)
Summary
Cross-national differences in income inequality have been subject to decades of comparative empirical research (e.g., Smeeding et al 1990; Gottschalk and Smeeding 1997; Kenworthy 2004; Salverda et al 2009). Income and wealth appear to constitute largely independent dimensions of national levels of inequality This contribution will begin by probing this finding further and carefully documenting the lack of relationship between national levels of income inequality and wealth inequality, considering measures of broad inequality as well as concentration at the top of the distribution. Over the last three decades, scholarly interest in the distribution of household wealth has grown substantially (Keister and Moller 2000; Spilerman 2000; Killewald et al 2017) Research in this area has contributed to and been based on three main insights into the distinctiveness of wealth as a dimension of social stratification: First, wealth is a measure of economic well-being that is partly independent of other, more established indicators of economic status, reflected, for instance, in the far-from-perfect correlation between wealth and income at the household level. Investigations of the consequences of wealth have pointed to its unique role in providing a safety net to buffer economic shocks and in the intergenerational maintenance of inequality (e.g., Haellsten and Pfeffer 2017)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
