Wealth Inequality in the South: Multi‐Source Evidence from Uruguay

Abstract

While wealth accumulation and its distribution are arguably two of the key drivers of overall economic inequality, as well as being of major importance in their own right, very little is known about them in the developing world. I contribute to filling this gap by providing a micro–macro consistent series of aggregate wealth and its distribution in Uruguay. The country's balance sheet, which is not estimated by official institutions, is constructed for the first time by combining a wide array of data sources, leading to a book‐value wealth‐to‐income ratio of 450–500 percent. Private wealth distribution is then estimated based on the capitalization method, taking stock of combined survey‐tax‐national accounts micro‐data, resulting in a top 1 percent wealth share of 37–40 percent. Estimates are systematically compared with results based on the estate multiplier method, real estate wealth tax, household wealth survey, and Forbes billionaires list.