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Inherited vs self-made wealth: Theory & evidence from a rentier society (Paris 1872–1927)

Piketty, Thomas and Postel-Vinay, Gilles and Rosenthal, Jean-Laurent (2014) Inherited vs self-made wealth: Theory & evidence from a rentier society (Paris 1872–1927). Explorations in Economic History, 51 . pp. 21-40. ISSN 0014-4983. https://resolver.caltech.edu/CaltechAUTHORS:20140313-103105418

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Abstract

We divide decedents into two groups: “rentiers" (whose wealth is smaller than the capitalized value of their inherited wealth) and “savers” (who consumed less than their labor income). Applying this split to a unique micro data set on inheritance and matrimonial property regimes, we find that Paris from 1872 to 1927 was a “rentier society”. Rentiers made up about 10% of the population of Parisians but owned 70% of aggregate wealth. Rentier societies thrive when the rate of return on private wealth r is larger than the growth rate g (say, r = 4% vs g = 2%). This was the case in the 19th and early 20th centuries and is likely to happen again in the 21st century. At the time, top successors’ capital income sustains living standards far beyond what labor income alone would permit.


Item Type:Article
Related URLs:
URLURL TypeDescription
https://doi.org/10.1016/j.eeh.2013.07.004DOIArticle
https://halshs.archives-ouvertes.fr/halshs-00601075OrganizationDiscussion Paper
Additional Information:© 2013 Published by Elsevier Inc. Received 27 April 2013. Available online 28 August 2013.
Subject Keywords:Inherited wealth; Wealth inequality; Rentiers; Paris
Record Number:CaltechAUTHORS:20140313-103105418
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20140313-103105418
Official Citation:Thomas Piketty, Gilles Postel-Vinay, Jean-Laurent Rosenthal, Inherited vs self-made wealth: Theory & evidence from a rentier society (Paris 1872–1927), Explorations in Economic History, Volume 51, January 2014, Pages 21-40, ISSN 0014-4983, http://dx.doi.org/10.1016/j.eeh.2013.07.004. (http://www.sciencedirect.com/science/article/pii/S0014498313000314)
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44299
Collection:CaltechAUTHORS
Deposited By: Ruth Sustaita
Deposited On:13 Mar 2014 20:37
Last Modified:23 Jan 2020 21:28

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