Full text: The Personal Distribution of Income

11 
distribution,provided the independence condition is 
fulfilled and y < w. 
We have now to face the fact that the rate of return on 
wealth is in reality not independent of wealth. The cross 
classifications of wealth and income of wealth owners for 
Holland and Sweden show that mean income is a linear 
function of wealth,and the regression coefficient is 
smaller than one. 
Various reasons are responsible for the decline of the 
rate of return with increasing wealth.Most important, the 
income of wealth owners contains more or less considerable 
amounts of earned income which are loosely connected with 
the ownership of wealth but which can hardly be separated 
even conceptually quite apart from the lack of data. The 
earned income will be less important the greater the 
wealth,simply because one can get rarely as much income 
from work as from large wealth.In particular, income from 
non-incorporated business is to a considerable extent 
earned income,and this type of business is less frequently 
present the greater the wealth. A number of other factors 
also contribute to explain the regression coefficient. The 
retained income of corporations will not find expression 
in the income of shareholders but it will, at least in 
many cases, affect the shareholders wealth via the market
	        

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