Gabriel Zucman

Wealth and Inheritance in the Long Run

This chapter offers an overview of the empirical and theoretical research on the long-run evolution of wealth and inheritance. Wealth–income ratios, inherited wealth, and wealth inequalities were high in the eighteenth to nineteenth centuries up until World War I, then sharply dropped during the twentieth century following World War shocks, and have been rising again in the late twentieth and early twenty-first centuries. We discuss the models that can account for these facts. We show that over a wide range of models, the long-run magnitude and concentration of wealth and inheritance are an increasing function of image where image is the net-of-tax rate of return on wealth and g is the economys growth rate. This suggests that current trends toward rising wealth–income ratios and wealth inequality might continue during the twenty-first century, both because of the slowdown of population and productivity growth, and because of rising international competition to attract capital.

Who owns the wealth in tax havens? Macro evidence and implications for global inequality

Drawing on newly published macroeconomic statistics, this paper estimates the amount of household wealth owned by each country in offshore tax havens. The equivalent of 10% of world GDP is held in tax havens globally, but this average masks a great deal of heterogeneity—from a few percent of GDP in Scandinavia, to about 15% in Continental Europe, and 60% in Gulf countries and some Latin American economies. We use these estimates to construct revised series of top wealth shares in ten countries, which account for close to half of world GDP. Because offshore wealth is very concentrated at the top, accounting for it increases the top 0.01% wealth share substantially in Europe, even in countries that do not use tax havens extensively. It has considerable effects in Russia, where the vast majority of wealth at the top is held offshore. These results highlight the importance of looking beyond tax and survey data to study wealth accumulation among the very rich in a globalized world.