This webinar, jointly organised by the OECD and EC DG Employment, presented new comparative measures of household wealth distribution as well as the key findings from the last OECD policy brief on “Inequalities in household wealth and financial insecurity of households”. The OECD Wealth Distribution Database (WDD) contains comparative statistics on the extent of wealth concentration across OECD countries, based on harmonised wealth microdata. The brief analyses the most recent levels and longer-term trends in the distribution of financial and non-financial wealth and its composition at the top and the bottom of the distribution. It looks at the availability of liquid wealth holdings for poorer households as a buffer to draw in exceptional circumstances such as the current crisis, to ensure stable living conditions and guarantee financial security. Finally, it discusses policy options to help counteract high and rising wealth inequality.

1. INEQUALITIES IN HOUSEHOLD
WEALTH AND FINANCIAL
INSECURITY OF HOUSEHOLDS
OECD-EC POLICY WEBINAR | 6TH JULY 2021
Carlotta Balestra
Inequalities Unit
OECD WISE Centre

2. © OECD |
New OECD wealth data and Policy Brief
Wealth Inequalities and Financial Insecurity of Households
Update of the OECD WDD, available from today
on Oecd.Stat
OECD WISE Policy Brief
1. Levels and recent trends in household
wealth inequality;
2. Focus on household financial insecurity –
income and wealth jointly at the bottom of
the distribution
Balestra, C. et al. (forthcoming 2021), “Inequalities in household wealth – Trends, Drivers and
Policy Implications”, OECD Social, Employment and Migration Working Papers.
 Lack of liquidity
 Over-indebtedness

3. 1. New evidence on wealth inequality

4. © OECD |
Inequality in household wealth is very high
Wealth Inequalities and Financial Insecurity of Households
Share of total net wealth, 2018 or latest
5 least unequal countries 5 most unequal countries
Source: OECD Wealth Distribution Database, https://oe.cd/wealth.
• Across the OECD, the wealthiest
10% of households hold 52% of
total net wealth
• This compares with 24% of total
income held by the 10% of people
at the top of the income
distribution
• The bottom 40% of households
hold 3% of total net wealth on
average
• Country-rankings are affected by
methodological issues (e.g.
treatment of pension wealth;
accurate capture of the top of the
distribution)

5. © OECD |
Household wealth became more concentrated
in many – but not all – OECD countries
Percentage point change in share of
total net wealth, OECD average,
2010-2018
Wealth Inequalities and Financial Insecurity of Households
• Average net wealth levels have
grown virtually everywhere in
the past decade, but not
everyone benefitted equally
from this growth
• Greater concentration at the
top in a majority of countries,
esp. in UK, Spain and the Slovak
Republic (+ 4.7 p.p. or more)
• Lower concentration at the top
esp. in Austria and Germany (-
3.7 p.p. or more)
Source: OECD Wealth Distribution Database, https://oe.cd/wealth.
-2 -1 0 1 2
Bottom 40% Next 50% Top 10% (↗)

6. © OECD |
The composition of household wealth varies
significantly across the wealth distribution
Wealth Inequalities and Financial Insecurity of Households
• Non-financial wealth is by
far the most important type
of asset across the wealth
distribution
• Financial wealth accounts
for larger shares of total
assets at the top
• Debt is particularly
significant for households in
the bottom 40% of the
distribution.
• The portfolio structure has
changed over time
Share of total assets, OECD average,
2018 or latest
82% 83%
61%
18% 17%
39%
-54%
-14% -6%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
Bottom 40% Next 50% Top 10%
Non-financial assets Financial assets Debt
Source: OECD Wealth Distribution Database, https://oe.cd/wealth.

7. 2. Focus on household financial insecurity
(income and wealth jointly)

8. © OECD |
Nearly one-in-ten lower-income households were
over-indebted at the onset of the COVID crisis
Share of lower-income households with
debt-to-income ratio higher than 3
Source: OECD Wealth Distribution Database; OECD computations based
on the HFCS and on the LWS.
• If a household’s debt load is
too high, a fall in income is
more likely to affect its
ability to keep up with
repayments
• Large cross-country
variation
• In 5 out of the 7 countries
with available data since the
global financial crisis, levels
of over-indebtedness have
increased
0%
5%
10%
15%
20%
25%
Around 2018 (↗) Mid-2000s

9. © OECD |
In the run-up to the crisis, two out of five lower-
income individuals lacked sufficient liquid financial
buffers to cope with a three weeks’ loss of income
Share of lower-income individuals with
insufficient liquid financial buffers
Source: OECD Wealth Distribution Database; OECD computations
based on the HFCS.
• During the first 6 months of the
COVID-19 crisis, more than one in
four lower-income respondents
has used their savings or sold
assets to mitigate financial
hardship (OECD RtM)
• A quarter of lower-income
individuals both lack sufficient
liquid buffers and is income poor
• Younger people, single parents
and those living in large
households are more likely to
lack liquid buffers
0%
10%
20%
30%
40%
50%
60%
70%
80%

10. © OECD |
The financial situation of indebted lower-income
households has often grown more precarious
0%
10%
20%
30%
40%
50%
60%
70%
80%
Around 2018 Around 2010
Share of lower-income indebted households
with liquid financial buffers less than 5% of
their debt load
Source: OECD computations based on the HFCS and LWS.
• Two out of five lower-
income indebted
households have liquid
assets less than the
equivalent of 5% of their
debt
• Over the past decade, this
share has increased in
most countries

11. © OECD |
What policy makers can do…
Support vulnerable households accumulate wealth:
 Develop attractive savings schemes for small savers;
 Strengthen financial literacy;
 Review design of asset tests;
 Design equitable homeownership support programmes;
 Consider schemes of minimum capital endowments for young adults.
Ensure progressivity of tax and spending so that all wealthy households
contribute to financing of public services:
 Adequately tax personal capital income;
 Make better use of well-designed inheritance and gift taxation;
 Ensure wealth taxes are well-designed and levied on the wealthiest;
 Limit opportunities for tax planning and avoidance, and tax evasion;
 Investigate ways to tax wealth transfers on a lifetime basis.

12. © OECD |
Thank you!
Carlotta.Balestra@oecd.org
Michael.Forster@oecd.org
Kamil.Kouhen@oecd.org (Data Manager)
oe.cd/wdd
oe.cd/wealth