Intergenerational wealth transfers and wealth inequality in rich countries: What do we learn from Gini decomposition?

Brian Nolan, Juan Palomino, Philippe Van Kerm and Salvatore Morelli

Economics Letters, 2021, vol. 199, issue C

Abstract: The role of intergenerational transfers of wealth via inheritance and gifts inter vivos in the accumulation of household wealth and the generation of wealth inequality has been hotly debated. This paper uses data from household wealth surveys for six rich countries – Britain, France, Germany, Italy, Spain and the US – to assess the contribution of intergenerational wealth transfers to wealth inequality using decomposition methods for the Gini coefficient. The results show that transfer wealth is consistently a good deal more unequally distributed than non-transfer wealth and total wealth. Transfer wealth accounts for only about one-tenth of overall wealth inequality for the US compared to one-third for Germany and Italy. This mirrors the importance of transfer wealth in total wealth in each country, with differences in inequality in transfer wealth and its correlation with total wealth having only a modest impact. We find that a marginal percentage increase in all transfers reduces total wealth inequality in Britain, Germany and the US, while it would increase total wealth inequality in France, Italy and Spain.

Keywords: Wealth; Inheritance; Intergenerational transmission (search for similar items in EconPapers)
JEL-codes: D31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176520304614
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:199:y:2021:i:c:s0165176520304614

DOI: 10.1016/j.econlet.2020.109701

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().