A Flying Start intergenerational Transfers, Wealth Accumalation, and Entrepreneurship of Descendants

Elin Colmsjoe
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Elin Colmsjoe: Department of Economics, University of Copenhagen

No 24-02, CEBI working paper series from University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI)

Abstract: Early wealth transfers are growing relative to inheritances, yet their effects on inequality remain poorly understood. I identify large wealth transfers tied to housing market entries by exploiting a Danish tax policy that allows parents to sell housing to their children below market value, and study their effects on recipients investments and wealth. I find that transfers increase the likelihood of starting a business over the next decade while also raising consumption. Instrumenting transfer amounts with a policy-determined cap maintains significant investment responses, indicating that transfers directly support wealth accumulation by shaping financial choices early in life. Effects are strongest among recipients outside the top of parental wealth, suggesting that the business-investment channel promotes intergenerational mobility.

Keywords: Intergenerational transmission; wealth; inter vivos transfers; entrepreneurship (search for similar items in EconPapers)
JEL-codes: D31 G51 J62 (search for similar items in EconPapers)
Pages: 55
Date: 2025-09-08
New Economics Papers: this item is included in nep-his and nep-sbm
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