Social Security and Trends in Wealth Inequality

68 Pages Posted: 14 Apr 2020 Last revised: 10 Nov 2023

See all articles by Sylvain Catherine

Sylvain Catherine

University of Pennsylvania - Finance Department

Max Miller

Harvard Business School, Finance Unit

Natasha Sarin

Yale University Law School and Yale School of Management

Date Written: February 29, 2020

Abstract

Recent influential work finds large increases in inequality in the U.S. based on measures of wealth concentration that notably exclude the value of social insurance programs. This paper shows that top wealth shares have not changed much over the last three decades when Social Security is properly accounted for. This is because Social Security wealth increased substantially from $7 trillion in 1989 to $39 trillion in 2019 and now represents 49% of the wealth of the bottom 90% of the wealth distribution. This finding is robust to potential changes to taxes and benefits in response to system financing concerns.

Keywords: Social Security, Inequality, Top Wealth Shares

JEL Classification: D31, E21, G51, H55, N32

Suggested Citation

Catherine, Sylvain and Miller, Max and Sarin, Natasha, Social Security and Trends in Wealth Inequality (February 29, 2020). Jacobs Levy Equity Management Center for Quantitative Financial Research Paper , Available at SSRN: https://ssrn.com/abstract=3546668 or http://dx.doi.org/10.2139/ssrn.3546668

Sylvain Catherine

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

Max Miller

Harvard Business School, Finance Unit ( email )

25 Harvard Way
355
Boston, MA 02163
United States

HOME PAGE: http://www.max-miller.finance

Natasha Sarin (Contact Author)

Yale University Law School and Yale School of Management ( email )

127 Wall St.
New Haven, CT 06511
United States
2034325552 (Phone)
20001-4959 (Fax)

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