The Problem of Non-Congruence between Income and Wealth Distributions in the Study of Economic Inequality: Towards a New Classification of Economic Elites in OECD Countries

Important research on top income and top wealth distributions has shown that the current drivers of economic inequality are located in the top percentiles and, to a lesser degree, the top deciles. This paper proposes to address the continuing relevance of top deciles and percentiles as concepts of analysis in economic inequality. While recognizing their important contributions in the study of inequality, it will be argued that this field would greatly benefit from drawing upon the theoretically grounded literature of class analysis and elite studies in order to take further advantage of the new possibilities in empirical research – namely, the growing availability of household wealth data. Specifically, as concepts of analysis, top income and wealth percentiles highlight the classic problem of non-congruence in weberian class analysis. Households may not only hold different positions in terms of class, status and power, but also, in the context of class, they hold different positions in the respective income and wealth distributions. While this is already known, the literature has yet to explore this in depth. How can this we make sense of this non-congruence? To what extent do income elites overlap with the wealth elites and how might these different categories be distinguished? Is there cross-country heterogeneity in the overlap of top income and wealth? To answer these questions, a comparative analysis was performed on the eleven OECD countries participating in the Luxembourg Wealth Study (LWS). The LWS is currently the most comprehensive database to study both income and wealth inequality conjointly in a comparative approach. By using a principal component analysis on income sources (i.e. labour income, capital income, self-employment income, etc.) and wealth, a classification of economic elites will be proposed. The results highlight a promising way that the income/wealth non-congruence may be analysed in the study of economic inequality.