Capitalists in the Twenty-First Century

Publish Date: 31-07-2019

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Author(s): Matthew Smith Danny Yagan Owen Zidar Eric Zwick

Type: Literature/Paper

Synopsis: · Our findings draw attention to a class of entrepreneurs hidden from public view who prevail among top earners and whose human capital income is key for understanding top incomes. An important role for human capital is consistent with the view that the demand for top human capital has outpaced its supply, with the returns to top human capital increasingly taking the form of business income. · In our data, the owners appear to be managers and key workers, which contrasts with the separation of ownership and control in public company governance. · In both number and aggregate income, these groups far surpass that of top public company executives, who have been the focus of much inequality commentary. Typical firms owned by the top 1–0.1% are single-establishment firms in professional services (e.g., consultants, lawyers, specialty tradespeople) or health services (e.g., physicians, dentists). A typical firm owned by the top 0.1% is a regional business with $20M in sales and 100 employees, such as an auto dealer, beverage distributor, or a large law firm.

Public Link: https://academic.oup.com/qje/article-abstract/134/4/1675/5542244

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