Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311140 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2976
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We use 25 years of tax records for the Norwegian population to study the mobility of wealth over people's lifetimes. We find considerable wealth mobility over the life cycle. To understand the underlying mobility patterns, we group individuals with similar wealth rank histories using agglomerative hierarchical clustering, a tool from statistical learning. The mobility patterns we elicit provide evidence of segmented mobility. Over 60 percent of the population remains at the top or bottom of the wealth distribution throughout their lives. Mobility is driven by the remaining 40 percent, who move only within the middle of the distribution. Movements are tied to differential income trajectories and business activities across groups. We show parental wealth is the key predictor of who is persistently rich or poor, while human capital is the main predictor of those who rise and fall through the middle of the distribution.
Subjects: 
wealth dynamics
agglomerative hierarchical clustering
life cycle
equality of opportunity
intergenerational links
JEL: 
D31
E21
C23
C38
C55
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6824-9
Document Type: 
Working Paper

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