Inherited wealth and demographic aging

Harun Onder and Pierre Pestieau

No 7739, Policy Research Working Paper Series from The World Bank

Abstract: The role of inherited wealth in modern economies has increasingly come under scrutiny. This study presents one of the first attempts to shed light on how demographic aging could shape this role. It shows that, in the absence of retirement annuities, or for a given level of annuitization, both increasing longevity and decreasing fertility should reduce the inherited share of total wealth in a given economy. Thus, aging is not likely to explain a recent surge in this share in some advanced economies. Shrinking retirement annuities, however, could offset and potentially reverse these effects. The paper also shows that aging could increase the size of individual bequests vis-à-vis real wages. However, these bequests will be more unequally distributed if aging is driven by a drop in fertility. In comparison, the effect of increasing longevity on their distribution in non-monotonic.

Keywords: Pro-Poor Growth; Equity and Development; Achieving Shared Growth (search for similar items in EconPapers)
Date: 2016-06-30
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Inherited Wealth and Demographic Aging (2016)
Working Paper: Inherited Wealth and Demographic Aging (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:7739

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