
Capitalists in the 21st Century - barry-cotter
https://www.nber.org/papers/w25442
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barry-cotter
> Have the idle rich replaced the working rich at the top of the U.S. income
> distribution? Using tax data linking 11 million firms to their owners, this
> paper finds that entrepreneurs who actively manage their firms are key for
> top income inequality. Most top income is non-wage income, a primary source
> of which is private business profit. These profits accrue to working-age
> owners of closely-held, mid-market firms in skill-intensive industries.
> Private business profit falls by three-quarters after owner retirement or
> premature death. Classifying three-quarters of private business profit as
> human capital income, we find that most top earners are working rich: they
> derive most of their income from human capital, not physical or financial
> capital. The human capital income of private business owners exceeds top
> wage income and top public equity income. Growth in private business profit
> is explained by both rising productivity and a rising share of value added
> accruing to owners.

