Patterns Of Wealth Accumulation Research Articles

Transactional pathways: Institutional possibilities for status and wealth under racial/caste capitalism

I introduce the concept of transactional pathways, coined by anthropologist Jane Guyer, to trace the institutional processes that contribute to uneven and unjust patterns of wealth and status distribution under systems of colonialism and racial/caste capitalism. Transactional pathways employ historical perspectives to reveal how divergent economic institutions and sources of valuation relate to social hierarchies. This approach links everyday economic transactions with patterns of wealth accumulation that are based not only on class, but intersectional social groups including race, caste, and/or ethnicity. Transactional pathways account for the fact that not only do different groups receive different amounts of valuable resources because of uneven distribution, but they have variable access to the symbolic power required to define which resources are deemed valuable in the first place and to monopolize them accordingly. The article briefly surveys foundational concepts from the economic anthropology literature before detailing transactional pathways. It introduces the case of attempted formalization of waste collection and recycling in Delhi, India, using the related concepts of thresholds and conversions to analyze key moments when wealth and status accumulation becomes especially possible in institutionally plural contexts.

Measuring the Gender Asset Gap: Evidence from Spain

While the income gender gap has been widely researched to date, less attention has been paid to the wealth gender gap. This paper analyses individual-level data of the Spanish tax agency between 2012 and 2017 and documents the existence of an increasing wealth gap in Spain in this period. It also finds a clear difference in wealth accumulation patterns between both genders, especially in what respects holdings of equity in productive companies. Additionally, it finds that both women and men in the highest quantiles of the wealth distribution have increased their wealth and that men hold more assets that women. With respect to income distribution, the data shows men’s income accounts for a larger share of total income, which reinforces the gender gap related to economic resources.

Review: Another Aesthetics Is Possible: Arts of Rebellion in the Fourth World War, by Jennifer Ponce de León

Review: <i>Another Aesthetics Is Possible: Arts of Rebellion in the Fourth World War</i>, by Jennifer Ponce de León

Localization of elite capture in wood charcoal production and trade: Implications for development outcomes of a forest management program in rural Senegal

This paper examines how decentralized forest governance policy led to new patterns of wealth accumulation in villages as a result of economic opportunities created by wood-charcoal production and trade in rural Senegal. In the region studied, the locus for development through decentralized governance was offered through an institution: the democratically elected Rural Council. USAID provided assistance to Rural Communities and their Rural Councils by implementing Wula Nafaa, a project supporting capacity-building and consolidation of institutional infrastructure to encourage wealth creation from forests in a sustainable and inclusive way. This case study was constructed with qualitative data collected during fieldwork and complemented by secondary sources of data. It was observed that a warping of mechanisms meant for promoting equitable access to charcoal-related economic opportunities enabled only a small group of socially and economically advantageously positioned rural elites to grab and dominate the access to forest resources. Elite capture not only excluded less-privileged villagersfrom entering the lucrative charcoal business, creating inequitable access for smaller producers, but had implications for contributing to the existing spatial disparities in development between the remote rural regions and the urban centers of the country.

Do aspirations reduce differences in wealth accumulation?

We propose aspirations as a mechanism that allows reconciling the standard theoretical result stating that altruistic individuals accumulate more wealth than non-altruistic individuals with the empirical evidence showing that bequest motivated and non-bequest motivated individuals behave similarly concerning wealth accumulation. In particular, we show that although introducing aspirations at different ages displays different effects on wealth accumulation, both adult and old aspirations reduce the positive effect on wealth accumulation brought about by the bequest motive. Thus, bequest and non-bequest motivated individuals exhibit similar patterns of wealth accumulation, which also results in a decrease in the inequality caused by bequests. As a by-product of our analysis, we show that the introduction of aspirations raises the speed of convergence to the dynastic steady state.

Can income differences explain the racial wealth gap? A quantitative analysis

We use a quantitative, overlapping-generations, incomplete markets, life-cycle model to explore the extent to which income differences can explain the racial wealth gap. The model features race, education, and family structure-specific stochastic household income processes estimated using data from the PSID, race and education-specific lifespan risk, an income floor, and intergenerational transfers of wealth and labor market ability. A calibrated version of the model fully accounts for the racial wealth gap observed in the data. In addition, it endogenously generates an empirically plausible degree of wealth inequality, both conditional and unconditional on race, and is broadly consistent with observed patterns of wealth accumulation over the life cycle. Simulations of the model suggest that income differences, on their own, can explain 43.0% of the racial wealth gap in levels, while bequest motives and intergenerational transfers of wealth, in the presence of income differences, account for 28.6% and 25.8% of the gap, respectively. We find that the income floor has a negligible impact on the racial wealth gap in levels, but causes the ratio of median wealth (white/black) to more than double as it disproportionately reduces the incentive that low income, low wealth households, the majority of whom are black, have to save. We also find that differences in lifespan risk have only a small impact on the racial wealth gap levels, but lead to a 13.7% increase in the ratio of median wealth.

Wealth Accumulation Patterns Among the Younger Generation in Britain

Wealth Accumulation Patterns Among the Younger Generation in Britain

Does Self-control Predict Wealth Creation Among Young Baby Boomers?

Why similar people have different patterns of wealth accumulation is puzzling. The behavioral life-cycle hypothesis indicates self-control is an important aspect of household saving behavior. This study investigated if household wealth creation from 1994 to 2008 could be predicted by self-control among a sample of young baby boomers using National Longitudinal Survey of Youth (NLSY79) data. Variables that significantly predicted 2008 net worth included homeownership, 1994 net worth, income, bankruptcy filing, inheritance, education level, race, marital status, children, retirement planning activities, locus of control, and self-mastery. The addition of self-control predictors to a regression model improved the model’s ability to predict net worth by 1.3 % above and beyond the human capital, financial status, and demographic predictor variables. In total, the model explained 60 % of the variance in net worth. Findings indicated that individuals who invested in their human capital, were homeowners, and had higher self-control, accumulated more wealth.

Intergenerational wealth accumulation and dispersion in the Ottoman Empire: observations from eighteenth-century Kastamonu

This article examines intergenerational wealth accumulation and transmission patterns in eighteenth-century Ottoman Kastamonu (located in north-central Anatolia), by utilizing the quantitative information as found in probate estate inventories. Specifically, it explores how sons' wealth levels were determined by a number of factors. Our results indicate that the father's wealth and the duration of wealth accumulation were positively related to the son's wealth. But the number of inheritors and, for the most part, honorary titles did not influence wealth accumulation. In addition to providing valuable insights into wealth accumulation patterns in eighteenth-century Anatolia, our findings allow us to make comparisons with Britain and comment on the process of economic development in the Middle East.

Smallholder Livelihoods, Wealth and Deforestation in the Eastern Amazon

In this paper, I examine patterns of wealth accumulation and their influence on deforestation among smallholders at Uruara and Redencao, in the state of Para in the Brazilian Eastern Amazon. I argue that the development of the smallholder economy has not been a linear process, and the diversity of smallholder farming systems and their patterns of wealth accumulation have varied implications for the rate and magnitude of deforestation. However, whilst there are differential impacts of farming practices on deforestation—cattle ranching has a greater impact than cash cropping or subsistence agriculture—the stronger correlate of deforestation is the wealth of the farmers. Wealthier farmers not only tend to deforest more in absolute terms, but also show a slightly greater propensity to deforest whatever their production system. Though cattle production is a key driver of wealth accumulation and thus deforestation, a significant number of smallholders adopt diversified production systems. The main factors explaining the relationship between the farming systems and deforestation were years of residence on the lot, distance of the lot to main market and the amount of day labor hired—and not variables describing household structure.

Trade Liberalization, Economic Restructuring and Urban Poverty: The Case of China*

Increased trade openness and rapid market‐oriented transformation have largely altered the patterns of wealth accumulation and wealth distribution in post‐reform China. In the present paper, with the help of Chinese provincial level data over the period of 1986 to 2000, simultaneous equations estimation and generalized method of moment techniques are applied to investigate the relationship between trade and poverty in urban China. Empirical results suggest that China's trade liberalization helps to reduce urban poverty both directly and indirectly through its favorable impacts on economic growth.

Racial Differences in Patterns of Wealth Accumulation

Making use of PSID data for 1984, 1989, and 1994, we examine race differences in patterns of asset accumulation. Our results indicate, as expected, that inheritances raise the rate of wealth accumulation of whites relative to that of African Americans. But, while whites devote a greater share of their income to saving, racial differences in saving rates are not significant, once we control for income. Though our results may be period-specific, we also do not find evidence that the rate of return to capital is greater for whites than for African Americans. Simulations suggest that African Americans would have gained significant ground relative to whites during the period if they had inherited similar amounts, saved at the same rate, had comparable income levels and, more speculatively, had portfolios closer in composition to those of whites.

Racial Differences in Patterns of Wealth Accumulation

Racial Differences in Patterns of Wealth Accumulation

Religion and Wealth: The Role of Religious Affiliation and Participation in Early Adult Asset Accumulation

Researchers have documented extreme inequalities in wealth ownership, but the processes that create these inequalities are not well understood. One important contributing factor that attracts little attention is religion. This study explores the relationship between religious participation, religious affiliation, and patterns of wealth accumulation. I argue that religion affects wealth ownership indirectly by shaping demographic behaviors. I also argue that religion directly influences wealth accumulation by identifying valuable goals, by providing a set of competencies that direct strategies of action, and by contributing to social contacts that provide information and opportunities that can enhance wealth ownership. The findings suggest that Jews enjoy tremendous gains in wealth ownership, while conservative Protestants accumulate relatively little wealth. In contrast, mainline Protestants and Catholics are indistinguishable from each other and from the general population. The results demonstrate the importance of family processes in shaping wealth accumulation, and they underscore the importance of culture in shaping economic behavior and ultimately in creating social inequality.

The Making and Evolution of the Buenos Aires Economic Elite in the Nineteenth Century: The Example of the Senillosas

The Making and Evolution of the Buenos Aires Economic Elite in the Nineteenth Century: The Example of the Senillosas

Precautionary Saving by Young Immigrants and Young Natives

This paper uses data from the 1979 Youth Cohort of the National Longitudinal Surveys (NLSY79) to explore the wealth accumulation patterns of younger cohorts as well as immigrants' and natives' precautionary saving in response to income uncertainty. We use two measures of wealth and construct a time‐varying, conditional measure of income uncertainty, instead of relying on a constant, unconditional, summary measure of income uncertainty. We use a buffer‐stock model of savings, and find that immigrants accumulate less wealth than do natives. Additionally, young natives' wealth accumulation patterns appear more responsive than those of their immigrant counterparts to income uncertainty.

Precautionary Saving by Young Immigrants and Young Natives

1. Introduction and Literature Review Foreign-born population accounted for approximately 9% of the total population residing in the United States by the mid-1990s and, including their children, they were responsible for approximately 51% of the U.S. population growth (Martin 1995). These dramatic changes in the U.S. population have prompted much economic research on the immigrant population. But despite the great deal of attention that has been paid to the labor market progress of immigrants, little is known about their saving and wealth accumulation patterns.1 Many studies requiring information on the saving behavior of immigrants simply assume that immigrant savings parallel that of natives (MaCurdy, Nechyba, and Bhattacharya 1998). However, it may be the case that immigrants behave differently, have different motives, different opportunities, and different needs with respect to saving and wealth accumulation vis-a-vis natives. Most of the limited literature on the saving behavior of immigrants is inspired by European and Middle Eastern guest-worker migration and consequently is geared to the behavior of temporary migrants.2 Three papers that focus on the saving behavior of immigrants in general are the papers by Galor and Stark (1990), Carroll, Rhee, and Rhee (1994), and Dustmann (1997). Galor and Stark note that immigrants and natives differ from one another in their migration probabilities. Because immigrants have ties to other countries, it is more likely that they emigrate relative to the native-born worker.3 Using an overlapping-generations model, Galor and Stark show that the higher the probability of emigration, the higher is the level of savings. Hence, they predict immigrants save more than the native-born. Dustmann models precautionary savings and assumes that immigrants maximize expected lifetime utility from consumption in the host and home country proportionally to the lifetime spent abroad and at home.4 Under appropriate restrictions,5 Dustmann shows that, if labor markets in the home and host countries are uncorrelated, immigrants will carry out more precautionary savings relative to a comparable native worker, because immigrants will be subject to greater income risk in the host country.6 However, it is also possible in Dustmann's formulation to have immigrants engaging in less precautionary saving relative to native workers. For example, if economic conditions across the two countries are correlated, immigrants could be subject to less lifelong income risk than natives, given their ability to diversify away labor market risk by operating in two markets rather than just one, as in the case of natives. Additionally, if the risk preferences of natives and immigrants are different, then the precautionary saving motive could be more or less pronounced in one group relative to the other, all else equal. Carroll, Rhee, and Rhee (1994) use the Canadian Survey of Family Expenditures to compare saving behavior of immigrants to Canada from different regions of the world. They conclude that immigrant saving does not significantly differ by country of origin. However, they do find that recent immigrants save less than do Canadian-born, and that immigrants' saving behavior approaches the pattern of the Canadian-born over time. Overall the theoretical literature tends to favor the hypothesis that immigrants carry out more precautionary savings than natives, which could result in immigrants accumulating more wealth than natives. Immigrants face greater uncertainty regarding their labor market participation, labor market progress, and health care coverage. These factors, along with geographic distance, may make it more difficult to obtain financial support from family members in times of necessity, requiring that immigrants maintain larger stocks of precautionary saving. But Dustmann's model, in consonance with a widely held view, also allows for immigrants to be more risk tolerant than natives since they are willing to undergo higher uncertainties and risks when they decide to migrate to a new country (Barsky et al. …

RISING INEQUALITY: TRENDS IN THE DISTRIBUTION OF WEALTH IN INDUSTRIALIZING NEW ENGLAND

This article assembles new data and methods for studying wealth inequality trends in industrializing America. Inequality grew sharply between 1820 and 1850, leveled off, and increased steadily between 1870 and 1900. Inequality grew due to compositional changes in the population, but also grew within occupations, age groups, and the native-born population. Proposed labor-market explanations are inconsistent with the fact that wealth inequality between occupational groups was declining. Wealth accumulation patterns are also inconsistent with the hypothesis of child default on responsibilities for old-age care. We propose research on a new explanation based on luck, rents, and entrepreneurship.

Family Structure, Race, and Wealth Ownership: A Longitudinal Exploration of Wealth Accumulation Processes

Researchers have documented racial inequalities in wealth ownership and have offered a variety of explanations to account for these differences. One potentially important contributing factor that has received little attention is racial differences in family structure. This paper explores racial differences in the structure of family of origin and family in adulthood and examines the impact of these differences on wealth accumulation patterns. Using the National Longitudinal Survey of Youth, I find that large family size and family disruptions in childhood are negatively associated with wealth accumulation, portfolio behavior, and wealth mobility in adulthood. My analyses suggest that family size is a more important factor determining wealth accumulation for whites than for blacks or Hispanics and that family disruption is most strongly related to wealth outcomes for Hispanics. I find that family structure in adulthood is only modestly associated with overall wealth but strongly related to portfolio behavior and wealth mobility and that these relationships are relatively fixed across racial groups. My findings lend support to arguments about the importance of the role that resource dilution plays in determining life outcomes. They also suggest that efforts to reduce racial inequality in wealth ownership may be most effective if they seek to reduce the impact of deprivation early in life.

Merchant Capital and the Roots of State Power in Senegal, 1930-1985

In most post-colonial regimes in sub-Saharan Africa, state power has been used to structure economic production in ways that have tended to produce economic stagnation rather than growth. In this book, Catherine Boone examines the ways in which the exercise of state power has inhibited economic growth, focusing on the case of Senegal. She traces changes in the political economy of Senegal from the heyday of colonial merchant capital in the 1930s to the decay of the neo-colonial merchant capital in the 1980s and reveals that old trading monopolies, commercial hierarchies and patterns of wealth accumulation were preserved at the cost of reforms that would have stimulated economic growth. Boone uses this case to develop an argument against analyses of political-economic development that identify state institutions and ideologies as independent forces driving the process of economic transformation. State power, she argues, is rooted in the material and social bases of ruling alliances.