Human capital, wealth, and Piketty’s calculations

David N. Weil has a new paper on this topic, and it makes some interesting points, here is one:

Net Social Security wealth of currently living Americans in 2013 was $12.9 trillion, or three quarters of a year’s GDP.

More generally he makes this point:

In 1700, at the beginning of the period that he studies in his book, marketable assets were indeed pretty much the only form of wealth.  But over the intervening 300 years, new types of wealth, most notably human capital and transfer wealth, have come to constitute a very significant fraction of total wealth.  Thus the constancy of the wealth/income ratio as portrayed in his data is an illusion.  More important, however, is the fact that the distribution of the new types of wealth that he does not measure is far more equal than, and not perfectly correlated with, wealth that falls into his analysis.

The paper is interesting throughout, the NBER version is here.  The top link here leads you go an ungated pdf.

Addendum: In a new essay Piketty responds to critics.


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