Working papers / Unpublished works
See here for: Other publications (book chapters, reports), Media/Op-Ed, Swedish publications.
Rising Gaps, Falling Inequality: Wealth in Sweden, 1999-2020
Hammar, O, Roth, P, Stokke, F, Waldenström, D (2026). ”Rising Gaps, Falling Inequality: Wealth in Sweden, 1999-2020”, Working Paper.
Abstract: We study the wealth distribution in Sweden between 1999 and 2020, using new population-wide administrative data linked to national accounts. Wealth rose sharply across the distribution. While absolute gaps between the top and middle widened, overall wealth inequality declined: the Gini coefficient fell from 0.87 to 0.77 and the top decile’s wealth share from 67 to 57 percent. Funded pension wealth reduced inequality, whereas business wealth in the top increased concentration. We also show that top wealth growth was driven by new individuals, liquid wealth concentrated among the wealthy, asset poverty declined, and younger cohorts became wealthier than earlier cohorts.
AI, Automation, and Taxation
Bastani, S, Waldenström, D (2024). ”AI, Automation, and Taxation”, CEPR DP.
Abstract: This chapter examines the implications of Artificial Intelligence (AI) and automation for the taxation of labor and capital in advanced economies. It synthesizes empirical evidence on worker displacement, productivity, and income inequality, as well as theoretical frameworks for optimal taxation. Implications for tax policy are discussed, focusing on the level of capital taxes and the progressivity of labor taxes. While there may be a need to adjust the level of capital taxes and the structure of labor income taxation, there are potential drawbacks of overly progressive taxation and universal basic income schemes that could undermine work incentives, economic growth, and long-term household welfare.
Cognitive Ability in Labor and Capital Markets
Bastani, S, Karlsson, J. Kolsrud, K, Waldenström, D (2026). ”Cognitive Ability in Labor and Capital Markets”, Working Paper.
Abstract: How does the reward to cognitive ability in the capital market compare to its reward in the labor market? Using Swedish registry data linking enlistment test scores to tax records, we find that ability predicts labor income more strongly in percentile ranks (9.6 versus 7.3 ranks per standard deviation), but in logs the capital gradient is three times larger as logs amplify variation near zero, while ranks compress high-income differences. To understand the channels, we decompose the ability–capital income association. Controlling for labor income, a one standard deviation increase in ability predicts 21% higher saving among savers and 0.5 percentage points higher portfolio returns among stock investors, reflecting risk-adjusted performance rather than greater risk-taking. The results suggest that cognitive ability confers a direct advantage in capital markets beyond its role in labor income, with implications for inequality and taxation.
What Determines the Capital Share over the Long Run of History?
Bengtsson, E, Rubolino, E, Waldenström, D (2020). ”What Determines the Capital Share over the Long Run of History?”, WP.
Abstract: This paper analyzes the determinants of the labor-capital split in national income for 20 countries since the late 1800s. Our main identification strategy focuses on unique historical quasi-experimental events: i) the introduction of universal suffrage, ii) close election wins of left-wing governments, iii) decolonization, iv) unionization shocks, and v) wars. We also run instrumented panel regressions. Our findings show that the capital share decreased in response to radical institutional and political shifts, such as the introduction of universal suffrage in the early 1900s, the undoing of colonialism and the implementation of redistributive policies during the post-war period. By contrast, the capital share increased following the erosion of trade unionism since the 1980s. Wars, despite destroying the capital stock, generated windfall profits that increased the capital share.