A micro perspective on r>g

By exploiting large-scale administrative data on income and estimated personal wealth in Norway from 2010 to 2018, this paper establishes the first micro-level analysis of the difference between the real return on wealth and the real growth rate of total pre-tax income, across the entire net wealth distribution. We show that for the top 40% of the distribution, the aggregate R-G of 1.8% underestimates its micro counterpart r-g, while the opposite happens for the bottom 60%. Moreover, for the bottom 50% of the net wealth distribution, it is indeed the case that r