Savings from Top Incomes and Accumulation in the United States Context

November 24, 2015

This paper proposes that high savings out of top incomes contributed to the steady wealth income ratio amongst US households.

Using the dynamics of inter-group accumulation rates, I propose an accounting decomposi- tion formula which captures savings rates for any reference group. This methodology is applied to data from national accounts, balance sheets and income distribution statistics in order to compute saving rates for the Top 1% of households in the US income distribution. The estimates support the idea that high savings from top incomes have captured a growing share of wealth between 1980 and 2010.

Author: Rishabh Kumar
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