Wealth Inequality: Opportunity for Me or for Others?
41 Pages Posted: 8 Jun 2021 Last revised: 9 Feb 2025
There are 2 versions of this paper
Wealth Inequality: Opportunity for Me or for Others?
Wealth Inequality: Opportunity or Unfairness?
Date Written: February 07, 2025
Abstract
We provide evidence for a new propagation mechanism of wealth inequality and mobility. Using unique administrative data and a quasi-field experiment of exogenous assignment, we find that educated entrants, faced with greater local wealth inequality and salient cases of wealth mobility, take financial, real, and self-employment risks and reach higher positions in the wealth distribution, while the less educated do not. This is driven by poorer communities with more salient cases of wealth mobility, consistent with peer exposure rather than supply-side effects. We find no evidence for other channels, such as obtaining higher-paying more secure jobs, relocating, or reducing debt.
Keywords: Household finance, wealth inequality, propagation of inequality, education, opportunity, refugees.
JEL Classification: G5, E21, E44, D31, D1
Suggested Citation: Suggested Citation