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Wealth inequality, intergenerational transfers and family background

Brian Nolan, Juan C. Palomino, Juan Rodríguez and Gustavo Marrero

INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford

Abstract: This working paper was previously titled "Wealth inequality, intergenerational transfers and socioeconomic background" We estimate the contribution of intergenerational transfers (inheritances and gifts) and family background to wealth inequality in four OECD countries: France, Spain, Great Britain and the U.S. We compare the observed wealth distribution with a non-parametric counterfactual distribution where all differences in wealth associated with intergenerational transfers and family background are removed. Despite the diversity of the countries analysed, we find similar patterns. The combined contribution of intergenerational transfers and family background to wealth inequality is sizeable in the four countries, ranging from 36% in Great Britain to 49% in the U.S. When interactions between the two factors are accounted for, and the Shapley value decomposition is used to fully disentangle the contribution of each factor based on its marginal contribution, intergenerational transfers account for between 26% in Great Britain to 36% of wealth inequality in France, with family background ranging from 9% in France to 17% in the U.S.

JEL-codes: D31 D63 I24 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2020-06, Revised 2021-07
New Economics Papers: this item is included in nep-isf
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Journal Article: Wealth inequality, intergenerational transfers, and family background (2022) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:amz:wpaper:2020-15

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