The Long and the Short of it: Inheritance and Wealth in Ireland

Simone Arrigoni, Laura Boyd () and Tara McIndoe-Calder ()
Additional contact information
Laura Boyd: Central Bank of Ireland
Tara McIndoe-Calder: Central Bank of Ireland

Economic Papers from Trinity College Dublin, Economics Department

Abstract: Inheritances matter for wealth accumulation and are often central to policy debates on wealth taxes. Using household level survey data, this paper shows that up to 2020 over one-third of households in Ireland had inherited wealth, the cumulative value of which ( 97 billion) accounts for approximately one sixth of current net wealth for these households. However, the impact of inheritance extends beyond its direct value as inheritors tend to be wealthier, with a greater ownership of property. Our analysis shows that inheritances in Ireland contribute little to wealth inequality, and may even have reduced it over time, in line with existing findings for Britain and the United States. Tentative evidence suggests that mechanisms behind this wealth equalising effect may be (i) the importance of inheritances for the acquisition of property assets for middle-wealth households, (ii) the rise of asset prices, especially house prices, and (iii) substitution from employee income to rental income among inheritors.

Keywords: intergenerational transfers; inheritances; wealth inequality; HFCS; Gini (search for similar items in EconPapers)
JEL-codes: D14 D31 D64 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2023-07
New Economics Papers: this item is included in nep-eec
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https://www.tcd.ie/Economics/TEP/2023/TEP1223.pdf

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Working Paper: The long and the short of it: Inheritance and wealth in Ireland (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:tep1223

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