Inherited wealth over the path of development: Sweden, 1810–2010
Henry Ohlsson (),
Jesper Roine () and
Daniel Waldenström ()
No 2014:7, Working Paper Series, Center for Fiscal Studies from Uppsala University, Department of Economics
Inherited wealth has attracted much attention recently, much due to the research by Thomas Piketty (Piketty, 2011; 2014). The discussion has mainly revolved around a long-run contrast between Europe and the U.S., even though data on explicit historical inheritance flows are only really available for France and to some extent for the U.K. We study the long-run evolution of inherited wealth in Sweden over the past two hundred years. The trends in Sweden are similar to those in France and the U.K: beginning at a high level in the nineteenth century, falling sharply in the interwar era and staying low thereafter, but tending to increase in recent years. The levels, however, differ greatly. The Swedish flows were only half of those in France and the U.K. before 1900 and also much lower after 1980. The main reason for the low levels in the nineteenth century is that the capital-income ratio is much lower than in “Old Europe”. In fact, the Swedish capital-income ratio was similar to that in the U.S., but the savings and growth rates were much lower in Sweden than in the U.S. Rapid income growth following industrialization and increasing savings rates were also important fac-tors behind the development of the capital-income ratio and the inheritance flow during the twenti-eth century. The recent differences in inheritance flows have several potential explanations related to the Swedish welfare state and pension system. Sweden was “un-European” during the nineteenth century because the country was so poor, Sweden is “un-European” today because so much wealth formation has taken place within the welfare state and the occupational pension systems. JEL: D30,
Keywords: inheritance; capital accumulation; inverse mortality multiplier * (search for similar items in EconPapers)
JEL-codes: D30 J10 N10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his and nep-hme
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Working Paper: Inherited Wealth over the Path of Development: Sweden, 1810–2010 (2014)
Working Paper: Inherited wealth over the path of development: Sweden, 1810–2010 (2014)
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