Sources of lifetime inequality

Mark Huggett, Gustavo Ventura, Amir Yaron

Research output: Contribution to journalArticlepeer-review

158 Scopus citations


Is lifetime inequality mainly due to differences across people established early in life or to differences in luck experienced over the working lifetime? We answer this question within a model that features idiosyncratic shocks to human capital, estimated directly from data, as well as heterogeneity in ability to learn, initial human capital, and initial wealth. We find that, as of age 23, differences in initial conditions account for more of the variation in lifetime earnings, lifetime wealth, and lifetime utility than do differences in shocks received over the working lifetime.

Original languageEnglish (US)
Pages (from-to)2923-2954
Number of pages32
JournalAmerican Economic Review
Issue number7
StatePublished - Dec 2011

ASJC Scopus subject areas

  • Economics and Econometrics


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