Advanced Search
MyIDEAS: Login to save this paper or follow this series

On the long-run evolution of inheritance: France 1820-2050

Contents:

Author Info

  • Thomas Piketty

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

Abstract

This paper attempts to document and account for the long run evolution of inheritance. We find that in a country like France the annual flow of inheritance was about 20%-25% of national income between 1820 and 1910, down to less than 5% in 1950, and back up to about 15% by 2010. A simple theoretical model of wealth accumulation, growth and inheritance can fully account for the observed U-shaped pattern and levels. Using this model, we find that under plausible assumptions the annual bequest flow might reach about 20%-25% of national income by 2050. This corresponds to a capitalized bequest share in total wealth accumulation well above 100%. Our findings illustrate the fact that when the growth rate g is small, and when the rate of return to private wealth r is permanently and substantially larger than the growth rate (say, r=4%-5% vs. g=1%-2%), which was the case in the 19th century and early 20th century and is likely to happen again in the 21st century, then past wealth and inheritance are bound to play a key role for aggregate wealth accumulation and the structure of lifetime inequality. Contrarily to a widely spread view, modern economic growth did not kill inheritance.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://halshs.archives-ouvertes.fr/docs/00/56/51/48/PDF/wp201012.pdf
Download Restriction: no

Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00564853.

as in new window
Length:
Date of creation: May 2010
Date of revision:
Handle: RePEc:hal:psewpa:halshs-00564853

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00564853
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/

Related research

Keywords: inheritance ; bequest ; wealth ; capital;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Wojciech Kopczuk, 2007. "Bequest and Tax Planning: Evidence from Estate Tax Returns," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 122(4), pages 1801-1854, November.
  2. Campbell, John & Calvert, Lauren E. & Sodini, Paolo, 2009. "Fight or Flight? Portfolio Rebalancing by Individual Investors," Scholarly Articles 2617031, Harvard University Department of Economics.
  3. Kessler, Denis & Masson, Andre, 1989. "Bequest and Wealth Accumulation: Are Some Pieces of the Puzzle Missing?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 3(3), pages 141-52, Summer.
  4. Edward Wolff & Ajit Zacharias, 2009. "Household wealth and the measurement of economic well-being in the United States," Journal of Economic Inequality, Springer, Springer, vol. 7(2), pages 83-115, June.
  5. Lena Edlund & Wojciech Kopczuk, 2007. "Women, Wealth and Mobility," NBER Working Papers 13162, National Bureau of Economic Research, Inc.
  6. Piketty, Thomas & Postel-Vinay, Gilles & Rosenthal, Jean Laurent, 2004. "Wealth Concentration in a Developing Economy: Paris and France, 1807-1994," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4631, C.E.P.R. Discussion Papers.
  7. Jesper Roine & Daniel Waldenström, 2009. "Wealth Concentration over the Path of Development: Sweden, 1873-2006," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 111(1), pages 151-187, 03.
  8. Fiaschi, Davide & Marsili, Matteo, 2012. "Distribution of wealth and incomplete markets: Theory and empirical evidence," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 81(1), pages 243-267.
  9. Arrondel, Luc & Laferrere, Anne, 2001. "Taxation and wealth transmission in France," Journal of Public Economics, Elsevier, Elsevier, vol. 79(1), pages 3-33, January.
  10. Oded Galor & Omer Moav, 2004. "Das Human Kapital: A Theory of the Demise of the Class Structure," GE, Growth, Math methods, EconWPA 0410003, EconWPA.
  11. Wojciech Kopczuk & Joseph Lupton, 2005. "To Leave or Not To Leave: The Distribution of Bequest Motives," NBER Working Papers 11767, National Bureau of Economic Research, Inc.
  12. William G. Gale & John Karl Scholz, 1991. "Intergenerational Transfers and the Accumulation of Wealth," UCLA Economics Working Papers, UCLA Department of Economics 624, UCLA Department of Economics.
  13. Cagetti, Marco & De Nardi, Mariacristina, 2008. "Wealth Inequality: Data And Models," Macroeconomic Dynamics, Cambridge University Press, Cambridge University Press, vol. 12(S2), pages 285-313, September.
  14. Jagadeesh Gokhale & Laurence J. Kotlikoff & James Sefton & Martin Weale, 1999. "Simulating the Transmission of Wealth Inequity via Bequests," NBER Working Papers 7183, National Bureau of Economic Research, Inc.
  15. Ray Barrell & Professor E. Philip Davis, 2004. "Costs of Financial Instability, Household-Sector Balance Sheets and Consumption," NIESR Discussion Papers, National Institute of Economic and Social Research 99, National Institute of Economic and Social Research.
  16. Laurence J. Kotlikoff, 1987. "Intergenerational Transfers and Savings," NBER Working Papers 2237, National Bureau of Economic Research, Inc.
  17. Laurent E. Calvet & John Y. Campbell & Paolo Sodini, 2009. "Fight Or Flight? Portfolio Rebalancing by Individual Investors-super-," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 124(1), pages 301-348, February.
  18. Kopczuk, Wojciech & Saez, Emmanuel, 2004. "Top Wealth Shares in the United States, 1916-2000: Evidence from Estate Tax Returns," National Tax Journal, National Tax Association, vol. 57(2), pages 445-87, June.
  19. Makoto Nirei & Wataru Souma, 2007. "A Two Factor Model Of Income Distribution Dynamics," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(3), pages 440-459, 09.
  20. Luc Arrondel & Anne Laferrère, 1994. "La transmission des grandes fortunes. Profil des riches défunts en France," Économie et Statistique, Programme National Persée, Programme National Persée, vol. 273(1), pages 41-52.
  21. Wolff, Edward N, 1989. "Trends in Aggregate Household Wealth in the U.S., 1900-83," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 35(1), pages 1-29, March.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hal:psewpa:halshs-00564853. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.