Do millionaires and billionaires create jobs?

The number of Swedish krona billionaires has risen sharply since the 1990s. The figures below were counted by different media with different methods and should be read as snapshots, not as a series: for 2019, different lists give anything from just over 200 to 336. We show only the counts and where they were published, not the lists.

Unemployment has not followed. It was 9.6 percent in 1996, when the list counted 28 billionaires, and 8.9 percent in 2021, when the list counted 542. In between it rose and fell with the business cycle.

That two curves move together, or do not, says little about cause. The number of billionaires is driven mostly by share prices and interest rates, unemployment by the business cycle, population and labour market policy. The charts show neither that billionaires create jobs nor that they do not. They show that the number of billionaires is a poor measure of how many people have a job.

The idea that lower taxes for the richest bring more investment and therefore more jobs further down is often called trickle down. The broadest study of the question is Hope and Limberg (2022), which follows 18 OECD countries over 50 years. Major tax cuts for high earners increased the top's share of income, but had no measurable effect on either growth or unemployment.

Zidar (2019) compares US states and reaches the same result from another direction. Employment rises when taxes are cut for the bottom 90 percent of earners, while cuts for the top ten percent have little effect.

That does not mean entrepreneurs do not matter. Haltiwanger, Jarmin and Miranda (2013) show that it is young firms, not small firms as such, that account for the net addition of jobs. Henrekson and Sanandaji (2014) find that entrepreneurs who became billionaires are more common per capita in countries with lower taxes, more venture capital and higher trust. Whoever builds a large company does create jobs. The question is whether the fortune afterwards creates them, or the company.

Swedish research pulls in different directions depending on what is measured. Researchers at the Research Institute of Industrial Economics (IFN) have long argued that Swedish taxes on ownership and entrepreneurship have been high and held back new, growing firms. The National Institute of Economic Research expects a lower corporate tax to raise the capital stock and, over time, real wages (special study 38, 2013). The Swedish Fiscal Policy Council (2024) notes that inequality in Sweden has grown mainly through capital income at the top, while labour income has become more evenly distributed.

The first half of the hypothesis, that the rich save a larger share of their money, is well supported. Dynan, Skinner and Zeldes (2004) show that the saving rate rises with lifetime income. Carroll and coauthors (2017) find that the propensity to consume an extra krona is much higher among households with few assets than among the wealthy.

Fagereng, Holm and Natvik (2021) follow Norwegian lottery winners. On average they spend about half of the prize the same year, and those who had little money in the bank beforehand spend the most. A krona to a household with thin margins thus more often becomes consumption than a krona to a wealthy one.

This matters when the economy has idle resources. Then demand decides how much is produced, and a krona spent creates more demand in the short run than a krona saved. The second half of the hypothesis, that consumption drives the economy, therefore also holds in a recession.

But saved money does not disappear. It is lent out or invested, and investment in machines, buildings and new firms is what raises productivity and thus wages in the long run. That the rich invest instead of consuming is therefore not in itself bad for jobs. Mian, Straub and Sufi (2021) show, however, that the growing saving of the richest in the US has largely financed other households' and the government's debt, not new investment. How much of the saving becomes investment depends on the state of the economy.

The average wage in Sweden was 158,904 kronor a year in 1990 and 546,171 kronor in 2025 (OECD). Prices have roughly doubled over the same period, so the real wage has risen by just over 70 percent. In constant prices, share prices have become just over seven times higher and house prices just under two and a half times higher.

Three caveats. The share index shows prices only: with reinvested dividends, stocks would have risen considerably more. 1990 was the year before the banking crisis, so house prices start high and fall first. And the average wage is affected by who has a job, not only by what each job pays.

Those who owned shares or a home have thus received a larger part of the growth than those who had only their wage. But wages and capital are not opposites. Real wages have risen, just more slowly.

Who has shared in the rise in share prices depends on who owns. Statistics Sweden's income statistics show that the tenth of the population with the highest disposable income receives 78 percent of all capital income.

Two caveats. The deciles are sorted by disposable income, which includes capital income, so someone with a large capital gain ends up high for that very reason. And much share ownership does not show up here at all: the premium pension, occupational pensions and the AP funds own shares on behalf of wage earners, and that return arrives only as a pension.

For. The rich save a larger share of an extra krona than others. In the large studies, tax cuts aimed at the richest have not produced more jobs. Demand from many ordinary households matters a great deal, especially in a recession.

Against. Saving and investment are not lost to the economy: capital raises wages over time. Entrepreneurs who build new, growing firms create many jobs, and the conditions they face matter.

Unclear. How much of the rich's saving in Sweden becomes new investment, and whether more billionaires mean more jobs. Swedish statistics are not enough to settle it.

What is best supported is that jobs are created by firms that grow and by demand from many households, rather than by large fortunes growing larger. A large fortune is more often the result of a company that succeeded than the cause of the jobs in it.

Sweden has neither an inheritance tax nor a wealth tax. The inheritance tax was abolished in 2004 and the wealth tax in 2007. Income inequality has risen since the 1990s, mainly because capital income has grown and is concentrated among those who already have the most. Measured by the Gini coefficient for disposable income, Sweden is now roughly level with Denmark and higher than Norway and Finland.

In the Nordics only Norway still has a wealth tax. Denmark abolished its in 1997 and Finland and Iceland in 2006, although Iceland brought it back temporarily after the financial crisis. That is why much of the research on wealth taxes comes from Norway and Denmark, and it is more nuanced than the debate: the tax affects how much the richest save and where they live, but the effects on jobs are small.

• Hope and Limberg (2022), The economic consequences of major tax cuts for the rich, Socio-Economic Review.
• Zidar (2019), Tax Cuts for Whom? Heterogeneous Effects of Income Tax Changes on Growth and Employment, Journal of Political Economy.
• Haltiwanger, Jarmin and Miranda (2013), Who Creates Jobs? Small versus Large versus Young, Review of Economics and Statistics.
• Henrekson and Sanandaji (2014), Small business activity does not measure entrepreneurship, PNAS.
• Dynan, Skinner and Zeldes (2004), Do the Rich Save More?, Journal of Political Economy.
• Carroll, Slacalek, Tokuoka and White (2017), The distribution of wealth and the marginal propensity to consume, Quantitative Economics.
• Fagereng, Holm and Natvik (2021), MPC Heterogeneity and Household Balance Sheets, American Economic Journal: Macroeconomics.
• Mian, Straub and Sufi (2021), The Saving Glut of the Rich, NBER.
• National Institute of Economic Research (2013), Economic effects of a lower corporate tax (in Swedish), special study 38.
• Swedish Fiscal Policy Council (2024), Economic inequality in Sweden, study 2024/1.
• Statistics: OECD (unemployment, share prices, average wage, house prices and the Economic Outlook before the splices, CC BY 4.0) and SCB (CPI and income per decile, CC0). Number of billionaires: .