Michael Haliassos, Goethe University Frankfurt

"Wealth Inequality: Opportunity for Me or for Others?"

Abstract

We provide evidence for a new propagation mechanism of wealth inequality and wealth transitions. 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 or more secure jobs, or investing in human capital.

Co-authors: Thomas Jansson and Yigitcan Karabulut

For more information about Michael Haliassos and his interesting work - link to his website.

Contact person: John V. Kramer