[*] This paper was prepared while the authors were visiting scholars at the Russell Sage Foundation. They wish to thank Tony Atkinson and Sol Polachek for helpful comments. Melissa Binder and John Higgins provided excellent research assistance.

We thank participants at the May 2006 WIDER project meeting on Personal Assets from a Global Perspective for their valuable comments and suggestions. Special thanks are due to Tony Atkinson and Markus Jäntti. Responsibility for all errors or omissions is our own. 1 1

This paper was prepared while the authors were visiting scholars at the Russell Sage Foundation. They wish to thank Tony Atkinson and So! Polachek for helpful comments. Melissa Binder and John Higgins providedexcellent research assistance. This paper is part of NBER's research program in Labor

We are extremely grateful to Barry Johnson for facilitating our use of the micro estate tax returns data and for his enormous help and patience explaining it. We thank Ed Wolff for providing us with additional and unpublished data from Wolff (1989). We thank two anonymous referees, Tony Atkinson

We thank participants at the May 2006 WIDER project meeting on Personal Assets from a Global Perspective for their valuable comments and suggestions. Special thanks are due to Tony Atkinson and Markus Jäntti. Responsibility for all errors or omissions is our own. 2

We thank participants at the May 2006 WIDER project meeting on Personal Assets from a Global Perspective for their valuable comments and suggestions. Special thanks are due to Tony Atkinson and Markus Jäntti. Responsibility for all errors or omissions is our own. 21

Stewart, and Jiri Veèernek for their help in various ways in assembling and interpreting data on the transition period, and to Tony Atkinson and FranHois Bourguignon for comments. Sections 2.2-2.5 draw heavily on joint work by Micklewright with A. B. Atkinson, reported in Atkinson and Micklewright

equivalence scales. We consider the use of alternative approaches that do not require the specification of a single scale and implement one of these in a practical comparison of Spain and the UK. Acknowledgements We are grateful to STICERD for facilitating our collaboration and to Tony Atkinson and François

benefited from discussions with many colleagues at the World Bank although the mandatory disclaimer applies: these are the views of the author, and should not be attributed to the World Bank or any affiliated organization. Last but not least, a special acknowledgement goes to Tony Atkinson, to whom

Monopoly”. While many colleagues have provided valuable and in some cases detailed comments, special debts are due to Kevin Murphy (who originally inspired the work), Tony Atkinson and Faruk Gul (for suggesting the subtitle and title of the article, respectively), Luciano de Castro and Michael