The paper examines the prediction of the permanent income hypothesis (PIH) that within-cohort consumption and income inequality increases with age. Using data from the United States, Great Britain, and Taiwan, the authors find that consumption and income inequality within cohorts increases with age in all three economies, with similar rates of increase. This suggests that cumulative differences in the effects of luck on consumption drive the spread of inequality. Other models of intertemporal choice, such as those with precautionary motives or liquidity constraints, can limit or prevent the spread of inequality, as can insurance arrangements that share risk across individuals. The paper first introduces the PIH, which implies that consumption follows a random walk and that cross-sectional dispersion of consumption within a fixed-membership group increases over time. This result is consistent with the observed increase in consumption inequality with age, despite the general perception that aggregate inequality changes slowly. The PIH does not necessarily imply that aggregate inequality increases over time, as people do not live forever. The secular behavior of aggregate inequality depends on how assets are passed from one generation to the next and on the age structure of the population. The authors then present evidence from household surveys in the United States, Britain, and Taiwan, showing that within-cohort consumption and income inequality increases with age. They use data from 47 annual household surveys, and find that the variance of log consumption increases with age in all three countries. The increase is most pronounced in the United States, followed by Britain, and then Taiwan. The results are consistent with the PIH, which predicts that consumption inequality increases with age due to the accumulation of idiosyncratic shocks. The authors also examine the relationship between consumption and income inequality, finding that income and earnings inequality also increase with age. However, the rate of increase is slower in the United States compared to Britain and Taiwan. The authors also consider the role of household size and composition in explaining the dispersion of consumption, finding that household size is a significant factor in explaining the increase in consumption inequality with age. The paper concludes that the PIH is consistent with the observed increase in consumption inequality with age, but that other models of intertemporal choice can also explain the data. The results suggest that private and social arrangements play a role in moderating the impact of risk on the distribution of individual welfare. The findings have important implications for understanding the dynamics of inequality and the role of risk in shaping consumption and income patterns.The paper examines the prediction of the permanent income hypothesis (PIH) that within-cohort consumption and income inequality increases with age. Using data from the United States, Great Britain, and Taiwan, the authors find that consumption and income inequality within cohorts increases with age in all three economies, with similar rates of increase. This suggests that cumulative differences in the effects of luck on consumption drive the spread of inequality. Other models of intertemporal choice, such as those with precautionary motives or liquidity constraints, can limit or prevent the spread of inequality, as can insurance arrangements that share risk across individuals. The paper first introduces the PIH, which implies that consumption follows a random walk and that cross-sectional dispersion of consumption within a fixed-membership group increases over time. This result is consistent with the observed increase in consumption inequality with age, despite the general perception that aggregate inequality changes slowly. The PIH does not necessarily imply that aggregate inequality increases over time, as people do not live forever. The secular behavior of aggregate inequality depends on how assets are passed from one generation to the next and on the age structure of the population. The authors then present evidence from household surveys in the United States, Britain, and Taiwan, showing that within-cohort consumption and income inequality increases with age. They use data from 47 annual household surveys, and find that the variance of log consumption increases with age in all three countries. The increase is most pronounced in the United States, followed by Britain, and then Taiwan. The results are consistent with the PIH, which predicts that consumption inequality increases with age due to the accumulation of idiosyncratic shocks. The authors also examine the relationship between consumption and income inequality, finding that income and earnings inequality also increase with age. However, the rate of increase is slower in the United States compared to Britain and Taiwan. The authors also consider the role of household size and composition in explaining the dispersion of consumption, finding that household size is a significant factor in explaining the increase in consumption inequality with age. The paper concludes that the PIH is consistent with the observed increase in consumption inequality with age, but that other models of intertemporal choice can also explain the data. The results suggest that private and social arrangements play a role in moderating the impact of risk on the distribution of individual welfare. The findings have important implications for understanding the dynamics of inequality and the role of risk in shaping consumption and income patterns.