Understanding the Determinants of Wealth Inequality

  • Livio Di Matteo


Determinants of inequality depend on the ability to take advantage of economic opportunities and responses to economic shocks. The Kuznets inverted u-shaped curve maintains that inequality worsens during industrialization and improves afterward. Other factors are public policy regarding taxes, including wealth taxation and government spending, labor force skills and unionization, institutions, education, resource endowments, and demographic factors such as aging and cohort size. Globalization, portfolio composition, home ownership rates, technological revolutions, changes in factor returns, wars, and economic shocks—as well as changes in economic growth patterns—are also factors. These factors can either push inequality up or pull it down with the long-term trend the outcome of a resultant between these forces, some of which exhibiting both push and pull tendencies at points in or over time.


Kuznets Determinants Estate taxation Push Pull 


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Authors and Affiliations

  • Livio Di Matteo
    • 1
  1. 1.Department of EconomicsLakehead UniversityThunder BayCanada

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