Andreas Fagereng

Seminar, Lund University

Seminar Bonn University

Seminar Unversitetet i Bergen

Seminar

Seminar Goethe University

Seminar

Seminar, Cunef University

Seminar CUNEF

Seminar

Seminar

Copenhagen University

EEA-ESEM

Bank of Canada

European Economic Association

SI 2022 Conference on Research in Income and Wealth

Banque de France

Workshop at Norges Bank

CEPR Micro and Macro Implications of Household Behaviour and Financial Decision-Making

Seminar Økonomisk Institutt Universitetet i Oslo

The Labor and Finance Online Seminar (LFOS) at Columbia GSB

Working Paper, Norges Bank 2021(5) s. 1-24

Seminar Bank of Spain

Seminar

Digital konferanse: "New was to measure consumption"

Centre for Economic Policy Research. Discussion papers

We exploit a school reform that increased the length of compulsory schooling in Norway in the 1960s to study the causal effect of formal general education on returns on wealth (k-returns). OLS estimates reveal a strong, positive and statistically significant correlation between education and returns on individual net worth. This effect disappears in IV regressions, implying that general education has no causal effect on individual performance in capital markets, whose heterogeneity largely reflects non-acquired ability. On the contrary, we find that education causes higher returns in the labor market (l-returns). We speculate about possible rationales for this important asymmetry.

NBER Working paper

Annual Congress of the European Economic Association

NBER Summer Institute, EF&G Research Meeting

Discussion Papers

We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway’s administrative tax records. We document a number of novel results. First, individuals earn markedly different average returns on their net worth (a standard deviation of 8.6%) and on its components. Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within narrow asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the net worth distribution increases the return by 18 percentage points (and 10 percentage points if looking at net-of-tax returns). Fourth, individual wealth returns exhibit substantial persistence over time. We argue that while this persistence partly arises from stable differences in risk exposure and assets scale, it also reflects heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.

American Economic Association: Annual Meeting

Seminar

Seminar

Konferanse: New Consumption Data, Universitetet i København

Statistisk sentralbyrå (SSB)

We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway’s administrative tax records. We document a number of novel results. First, individuals earn markedly different average returns on their net worth (a standard deviation of 8.6%) and on its components. Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within narrow asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the net worth distribution increases the return by 18 percentage points (and 10 percentage points if looking at net-of-tax returns). Fourth, individual wealth returns exhibit substantial persistence over time. We argue that while this persistence partly arises from stable differences in risk exposure and assets scale, it also reflects heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.

Workshop on New Consumption Data

CEPR Workshop on Household Finance, Spring 2017

Annual Meeting of the European Economic Association

NBER Summer Institute

Society of Economic Dynamics Annual Meeting

Santa Clare University research seminar

The New Macroeconomics of Aggregate Fluctuations and Stabilisation Policy

Econometric Society European Winter Meeting

Annual Conference of the International Association of Applied Econometrics

Statistisk sentralbyrå (SSB)

Strong intergenerational correlations in wealth have fueled a long-standing debate over why children of wealthy parents tend to be well off themselves. We investigate the role of family background in determining children's wealth accumulation and investor behavior as adults. Our research design allows us to credibly control for genetic differences in abilities and preferences and to identify the effects of exogenous changes in specific dimensions of family background. The analysis is made possible by linking Korean-born children who were adopted at infancy by Norwegian parents to a population panel data set with detailed information on disaggregated wealth portfolios and socioeconomic characteristics. The mechanism by which these Korean-Norwegian adoptees were assigned to adoptive families is known and effectively random. We use the quasi-random assignment to estimate the causal effects from an adoptee being raised in one type of family versus another. Our findings show that family background matters significantly for children's accumulation of wealth and investor behavior as adults, even when removing the genetic connection between children and the parents raising them. In particular, adoptees raised by wealthy parents are more likely to be well off themselves, whereas adoptees' stock market participation and portfolio risk are increasing in the financial risk taking of their adoptive parents. These intergenerational causal links are not driven primarily by inter vivos transfers or bequests. The detailed nature of our data allows us to explore other mechanisms, assess the generalizability of the lessons from adoptees, and compare our findings to results from behavioral genetics decompositions.