Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247241 
Year of Publication: 
2020
Series/Report no.: 
LIS Working Paper Series No. 806
Publisher: 
Luxembourg Income Study (LIS), Luxembourg
Abstract: 
Homoploutia describes the situation in which the same people (homo) are wealthy (ploutia) in the space of capital and labor income in some country. It can be quantified by the share of capital-income rich who are also labor-income rich. In this paper we combine several datasets covering different time periods to document the evolution of homoploutia in the United States from 1950 to 2020. We find that homoploutia was low after World War II, has increased by the early 1960s, and then decreased until the mid-1980s. Since 1985 it has been sharply increasing: In 1985, about 17% of adults in the top decile of capital-income earners were also in the top decile of labor-income earners. In 2018 this indicator was about 30%. This makes the traditional division to capitalists and laborers less relevant today. It makes periods characterized by high interpersonal inequality, high capital-income ratio and high capital share of income in the past fundamentally different from the current situation. High homoploutia has far-reaching implications for social mobility and equality of opportunity. We also study how homoploutia is related to total income inequality. We find that rising homoploutia accounts for about 20% of the increase in total income inequality in the United States since 1986.
Subjects: 
income inequality
homoploutia
political economy
Document Type: 
Working Paper

Files in This Item:
File
Size
1.78 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.