In this project we have studied aspects of income and wealth inequality and mobility. For convenience, we divide the main findings of our studies into four topical sections.

1. Trends in income and wealth inequality
The understanding of how economic inequality affects and is affected by the rest of society is based on properly generated facts and robustly estimated time trends. To measure the share of the economic distribution appearance and its change over time has therefore been central to the project.

One result of the study of Swedish top incomes is that capital income, and particularly realized capital gains, plays a major role. In Roine and Waldenström (2012), we take a close look at this question by analyzing microdata in order to find out about if capital gains are essentially transitory, associated with single-year asset sales, and therefore not representative of the person's income or whether they mainly go to the people already earning much. We find that the latter explanation does a better job.

An important project has been that of Roine and Waldenström (2015) in which we present an extensive research review and a number of syntheses of income and wealth distribution developments in the Western world since early 19th century industrialization. We describe the recent research in the field, we compile existing data and discuss problems in data sources and methods (all the data are compiled at our website www.uueconomics.se/Handbook.htm). We go through the distribution of income and wealth for the country and then discuss which models of explanation that is most consistent with the empirical results. Our main finding is that the industrial revolution, our time's most important technological structural change, does not appear to have increased income inequality.

We have also used methods for the analysis of time trends and trend breaks in income inequality. Most studies of different countries have seen researchers drawing conclusions about trends based on simple inspections of the data and visual shifts to various contemporaneous political or economic events. But in many cases it is difficult to discern whether trend reversal is robust, that is, statistically significant. Perhaps it is merely an artifact of the researcher's personal interpretation based on simultaneous political or economic events. In Roine and Waldenström (2011), we address the issue of trend reversals in a different way, namely by using time series econometric methods to estimating structural break points in the time series, which allows us to see whether the previously proposed trend violations are robust or not. We use methods suited both for individual countries (univariate models) and groups of countries (multivariate models). The results highlight a few episodes that truly formative income inequality evolution: the two World Wars and the early 1980s. We speculate about the causes of these crimes, particularly the 1980s political and institutional transformations.

One long-standing discussing in inequality research concerns the link between inequality measured from the household distribution of incomes and inequality measured as the shares of capital and labor in national income. Bengtsson and Waldenström (2015) sheds new light on this issue by making the first examination of how this links looks over the long-run over a large number of countries, spanning most of the twentieth century. They find that the link is very strong between the shares of income going to the top income earners (personal income distribution) and the capital share of value added (functional income distribution).

Finally, the most recent development of Swedish wealth inequality has not been studied because of the lack of microdata on wealth following the wealth tax repeal of 2007. Lundberg and Waldenström (2015) try to shed new light on the issue by using register information from capital income and capital expenditures to construct capitalized wealth for individuals, and then distributional estimates for the whole country. They use the availability of accurate wealth data until 2007 to test the goodness of fit of the capitalization method. Their overall finding is that although capitalized wealth may work as a basis for estimating wealth inequality, there is a tremendous variation in goodness of fit at the individual level and also for different asset classes.

2. Intergenerational mobility and the role of inherited wealth:
As we expressed in our project application, we may not only care about the cross-sectional distribution of income and wealth but also about the mobility in these distributions. One particularly important aspect for the interpretation of inequality is the degree of intergenerational mobility, that is, how important family background is for an individual's economic success.

Our project has conducted several studies on this subject. In Björklund, Roine and Waldenström (2012), we are studying how mobility between fathers and their sons look like in the Swedish income distribution when we take particular notice of whether the fathers are in the bottom, middle or the absolute income top. We use registry data to the study whether correlations between generations is different when we consider only income from work and when we consider total income, that is, which also includes capital income. We find that the correlation increases (which means that the mobility decreases) as we move up the income distribution and it becomes very high for fathers in the absolute income top. When we compare the different income concepts, we see that this pattern is most pronounced for total revenues, while the increase is marginal in labor income. The role of capital income therefore appears to be key. When we look more closely at the data, we see that the pattern is closely linked to wealth ownership of both those fathers their sons. Although we do not directly observe or inheritance of these data, evidence indicates that transfers such as these may explain the very low mobility that we find in the Swedish capital top.

We have also studied the wealth transfers between generations, an issue that is much more difficult to study in Sweden because of deficiencies in the data. The Swedish tax registers contain only information on the total taxable wealth of between three and ten percent of the population at different periods. But another data source is a Malmö-based materials from the 1930s where a whole generation of third-graders and their parents were surveyed and which scientists subsequently been linked to information about the third graders' children and grandchildren. In Adermon, Lindahl and Waldenström (2015) we append to these data new information from municipal and provincial archives over taxable wealth and estate inventories observed at various points in time during the 1900s. The material is thus unique. We find that fortune correlation between generations is level with the income correlation for the same population, whether using taxed wealth or estate at the time of death. The importance of heritage also studied. These observed in probate area for two generations, and we find that the inherited capital accounts for a very large part, 50–75 percent of the wealth correlation. This result is the first of its kind and can be very important for our understanding of the economic importance of inherited wealth.

The importance of inheritances is also studied in Ohlsson, Roine and Waldenström (2014), but then in an aggregate, macroeconomic perspective and over a very long time horizon: the last two hundred years. With the help of national totals for the Swedes' net worth, mortality in the population and the relationship between the fortunes of those who die and those who live (which is estimated from various microdata sources) it is possible to estimate the aggregate flow of inherited capital from those who die to those who are alive. The main result is that the annual inheritance flow, measured as a share of national income, was historically high – around ten percent – during the 1800s. Then its size dropped by half in the postwar period, but since the 1990s it has risen back to near the levels seen a hundred years earlier. The time trend similar to that Piketty found for France, but the levels are lower in Sweden. The study also calculates the percentage of inherited fortunes of household total wealth and temporal trend is similar, with high levels - around 80 percent inherited capital - before the 1910s and about 50 percent since in 1950.

As part of the study of the heritage, the project also work to compile a new historical series of the Swedish national wealth development since the 1800s (Waldenström 2015a, b). These data show how the great values that private and public sectors occurred in different periods, the composition of the fortunes had so on. The database will hopefully be able to be used in research for many years to come.

3. Taxation of income and capital
The distribution of income and wealth is closely linked to their taxation. The project has investigated this question in different ways. Since most analyses are based on data stemming from tax assessments, the role of taxation is discussed in just about every paper in the project.

In Bengtsson, Holmlund and Waldenström (in press), Swedish micro data is used over the period 1968–2009 to compute measures of tax progressivity in Sweden. One particular question concerns to what extent progressivity and redistribution differ depending on whether income and taxes are measured during a calendar year or in a lifetime (as measured by the 42-year income of individuals can followed so far). The main result is that life cycle progressivity is significantly lower and that this is largely due to the low income are short-lived.

The long-term development of inheritance tax, gift tax in Sweden from the introduction in 1885 to the abolition in 2004 are described and analyzed in Du Rietz, Henrekson and Waldenström (2015) and Henrekson and Waldenström (under publication). These studies are the first to take a comprehensive approach to this tax, including all tax tables for different types of heirs, valuation rules and special regulations concerning, for example, life insurances and family firms. Studying addition to calculating the amount of the tax for the inheritance of different types and sizes are looking for authors explain the development. We find that ideological motives is important explanation for the large increases in the inheritance tax rates in 1934 and 1948, but more and more loopholes meant that the tax lost its legitimacy and therefore abolished in 2004.

Fuest, Peichl and Waldenström (2015), the taxation of company profits in Europe and how sensitive the gains are in respect of tax design. The study also examines the degree to which Thomas Piketty predictions about the difference between interest rate and growth affects the distribution of wealth has support in international historical data, which it appears to have.

4. Inequality and health
The consequences of inequality are a major motivation for studying of the income and wealth distributions. In the book by Bergh, Nilsson and Waldenström (2012, in press) one specific outcome is studied: individuals' physical and mental health. The book goes through the measurement and methodological problems that exist, what impact that inequality may have on health, and what the latest research in the field say. It is clear that hundreds of studies during 1970s, 1980s and 1990s centuries fail to fully answer the question because of inadequate data and methods. The newer studies of micro panel data shows that inequality seems to have its own negative impact on individual well-being, but the effect is quite small.