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Financialization and Income Generation in the 21st Century: Rise of the Petit Rentier Class?

Author

Listed:
  • Adam Goldstein
  • Ziyao Tian
Abstract
This article considers the consequences of asset-based accumulation for household income factors and social class structure in twenty-nine countries from 1998-2016. Are financialization, asset-based welfare institutions, and rising real estate returns fueling a growing class of petit rentiers in capitalist economies? That is, households who accrue more than a trivial share of income from capital rather than labor or government transfers. The analysis draws on the Luxembourg Income Study data. Contrary to expectations, most countries saw declines in the share of households who accrue more than 10%, or 20% of income from assets. Estimates from correlated random effects models indicate that financialization is associated with between-country differences in the size of the petit rentier, but not within-country change over time. The decline of the petit rentier can be partly explained by declining interest rates, which reduces income from bank savings.

Suggested Citation

  • Adam Goldstein & Ziyao Tian, 2020. "Financialization and Income Generation in the 21st Century: Rise of the Petit Rentier Class?," LIS Working papers 801, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:801
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    References listed on IDEAS

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    Cited by:

    1. Ranaldi, Marco, 2021. "Global Distributions of Capital and Labor Incomes: Capitalization of the Global Middle Class," SocArXiv 3g59r, Center for Open Science.
    2. Petrova, Bilyana & Ranaldi, Marco, 2021. "Determinants of Income Composition Inequality," SocArXiv vyrz7, Center for Open Science.

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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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