Wealth inequality and the accumulation of debt

The chapter scrutinises wealth inequality, its measurement, trends, drivers, and relationship with income, using GINI contributions and new analysis of data and literature. The chapter finds increasing wealth inequality and polarization, although levels and trends vary widely. The comparability of wealth data is challenged by the presence of debt, lack of equivalisation, differences in wealth holdings, and exclusion of pension assets. Cross-country differences in wealth inequality seem better explained by social expenditures and debt take-up than by demographic factors and the labour market; trends are better explained by growing debt and financial assets, their fiscal treatment, and ‘superstars’. The relationship with income is not straightforward: high income inequality does not necessarily go together with high wealth inequality, and income-poor households are not always wealth-poor. Wealth should be taken into account in analysing inequality, together with income, and deeper study is needed of the role of debt.