Wealth Inequality: Opportunity for Me or for Others?

41 Pages Posted: 8 Jun 2021 Last revised: 9 Feb 2025

See all articles by Michael Haliassos

Michael Haliassos

Goethe University Frankfurt - Faculty of Economics and Business Administration; Centre for Economic Policy Research (CEPR)

Thomas Jansson

Sveriges Riksbank - Research Division

Yigitcan Karabulut

Frankfurt School of Finance & Management; CEPR

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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

Haliassos, Michael and Jansson, Thomas and Karabulut, Yigitcan, Wealth Inequality: Opportunity for Me or for Others? (February 07, 2025). Available at SSRN: https://ssrn.com/abstract=3862010 or http://dx.doi.org/10.2139/ssrn.3862010

Michael Haliassos (Contact Author)

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Theodor-W.-Adorno-Platz 3
PF H32
Frankfurt am Main, D-60323
Germany

Centre for Economic Policy Research (CEPR)

Paris
France

Thomas Jansson

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden

Yigitcan Karabulut

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

CEPR ( email )

London
United Kingdom

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