Eesti Pank researchers Merike Kukk, Jaanika Meriküll and Tairi Rõõm received this year’s Mihhail Bronštein Award in Economics from the Estonian Academy of Sciences for a series of research papers published in 2021–2023 on the distribution of wealth within households and wealth inequality.

The articles focus on inequality in the distribution of wealth, and analyse the gender gap in wealth in particular depth. They also address the distribution of savings within families. Tairi Rõõm, one of the winners of the award, said that the gender wealth gap is of current importance given the social trends in European countries over recent decades, as increasing numbers of people live alone, fewer marry, and couples do not stay together for as long as they used to. “Wealth is increasingly owned within couples by one partner and not in joint ownership. This leads to greater individualism in the accumulation of wealth and in investment decisions, and this then implies that the gender wealth gap and overall inequality of wealth will tend to increase in future. The more we know about inequality and its causes, the better able we are to take economic policy decisions that will affect that inequality”, she explained.

The first article in the award-winning series analysed how much wealth inequality may be underestimated by in household surveys, and why. Wealth inequality is as a rule much greater than income inequality, and can vary widely across countries. Measuring it accurately consequently needs internationally comparable data to be collected. Identification in the scientific literature of the problem of inaccuracy has resulted in innovations in how inequality is measured. The new method measures wealth inequality not only from survey data, but also from data from other sources like the list of the wealthiest Estonians published by the newspaper Äripäev.

Wealth inequality may also be underestimated if it is only measured at the level of the family, as such estimates do not take account of wealth possibly being unevenly distributed within the family. The second article in the series looks at how common it is for families to have multiple bank accounts, and whether savings are equally distributed or not. It emerged that more than half of families have either only personal accounts, or individual personal accounts and joint accounts, and the savings held on those accounts tend to be distributed unequally.

The other two award-winning articles analyse the extent of the problem of wealth inequality between men and women. The gender wealth gap in Estonia is substantially wider than the gender pay gap. The net wealth of men, which is their assets minus their liabilities, is on average 45% more than that of women. This gap comes almost entirely from the difference between the very richest men and women. Wealth is more or less equally distributed between men and women in the lowest deciles, but men in the highest decile have a lot more business wealth than women, and so the average amount of net wealth they each have is different. The wealth gap also favours men in most other European countries, though the picture can vary quite widely across countries. The differences in the average value of wealth between men and women in other countries also mainly arise because men have a lot more wealth than women among the very richest.

The award-winning research work has unveiled new information about wealth inequality and contributed to research methodologies and discussions on the topic.

The Estonian Academy of Sciences gives the Mihhail Bronštein Award in Economics for advances in theoretical research and their successful application. The award was created and is funded by the family of Academy Member Mihhail Bronštein.

Photos: Maris Krünvald

The award-winning articles:

1. Jaanika Meriküll, Tairi Rõõm (2022) Are survey data underestimating the inequality of wealth?, Empirical Economics, 62, 339–374, DOI: 10.1007/s00181-021-02030-6
2. Merike Kukk, W. Fred van Raaij (2022) Joint and individual savings within families: Evidence from bank accounts Journal of Family and Economic Issues, 43, 511–533, DOI: 10.1007/s10834-021-09783-3
3. Jaanika Meriküll, Merike Kukk, Tairi Rõõm (2021) What explains the gender gap in wealth? Evidence from administrative data, Review of Economics of the Household, 19(2), 501-547, DOI: 10.1007/s11150-020-09522-x
4. Merike Kukk, Jaanika Meriküll, Tairi Rõõm (2023) The gender wealth gap in Europe: Application of machine learning to predict individual-level wealth, Review of Income and Wealth, 69(2), 289-317, DOI: 10.1111/roiw.12596

See also photographs from the award ceremony at the Estonian Academy of Sciences on 23 January 2024.

Additional information:
Hanna Jürgenson
Eesti Pank
Communications Specialist
Tel: 56920 930
Press enquiries: [email protected]