Switzerland appears, at first glance, to be an ideal country in which to measure wealth inequality. It levies an annual personal wealth tax, producing unusually rich tax data. Yet those tax records miss a large share of household wealth. A recent CES ifo paper estimates that roughly half of Swiss private wealth is absent from federal tax statistics, principally because pension assets are tax-exempt and property is recorded at fiscal rather than market values.
Correcting these omissions changes the wealth distribution picture substantially. Earlier tax-based estimates suggested that wealth inequality had risen over the past two decades. The authors’ Distributional National Accounts, covering 2003–2022, instead find no pronounced upward trend. Wealth in Switzerland is unequal but inequality has not been increasing.
Occupational pensions account for roughly one-quarter to one-third of total personal wealth, yet are largely absent from wealth-tax data. The authors reconstruct these assets using pension statistics, observed annuity payments, age, employment income and statutory contribution rules.
The more important correction for the trend, however, concerns housing. Swiss tax statistics value property at fiscal values that can remain well below market prices and are adjusted only intermittently. As house prices rose strongly, this gap widened.
That matters because housing is especially important for middle-wealth households. If their homes rise sharply in market value while tax assessments lag behind, conventional statistics understate their wealth. The wealthiest households, which hold more financial and business assets, are less affected. The result is a mechanical rise in measured wealth shares at the high end even if the underlying distribution has not become much more unequal.
The methodology also addresses Switzerland’s fragmented data system. Detailed data come from Bern, but observations are reweighted to reproduce national distributions of taxable income, taxable wealth, age and sex. The report’s approach still requires assumptions, notably that the reweighted Bern data capture the national joint distribution of income and wealth, something the authors acknowledge cannot be directly tested.
None of this implies that Switzerland is egalitarian. The paper estimates that the average person in the top 1% holds around 500 times as much wealth as the average person in the bottom half. Switzerland’s wealth concentration lies above France’s but below that of the United States.
Nor has wealth stopped growing. Real wealth increased by about 3.75% per year over 2003–2022, with growth spread comparatively broadly across the distribution. Meanwhile the private wealth-to-income ratio rose from 5.6 to 8.5, meaning wealth has become more economically important relative to income even without a clear rise in wealth concentration.
The paper’s central conclusion is that tax data are not the same as economic wealth. Once pension assets are included properly and homes are valued at market prices, the apparent rise in Swiss wealth inequality largely disappears. Switzerland remains a country with substantial wealth disparities, but from 2003 to 2022 those disparities do not appear to have widened.
More on this:
CES ifo paper (in English)
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