The Stock Market and the Evolution of Top Wealth Shares in the United States

The mean wealth of the top wealth percentile surged more than two-and-a-half fold in real terms from 1983 to 2019. Changes in wealth over time can be decomposed into capital gains and savings. Capital gains in turn depend on asset price movements and portfolio composition. Using data from the Survey of Consumer Finances, the paper provides a decomposition of the change in the mean wealth and wealth share of the top percentile into a capital gains and savings effect. It then analyzes how much stock price movements and movements in other asset prices individually affect changes in the wealth of the top percentile. It finds that the rise in the stock market accounted for about a third of the advance in the wealth holdings of the super-rich, while increased business values explained about a quarter and gains in non-home real estate about a sixth.