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Distributional and Financial Impact of Universal Inheritance in four European countries

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Abstract

The idea of a Universal Inheritance (UI) has been recently gaining weight amongst scholars concerned over increasing wealth inequality. A UI consists of a one-off public payment of an agreed sum to each citizen of young adulthood. In this article, we provide the results of novel simulations to assess the cost and the distributive impact of such policy by testing different parameters for both the benefit amount and its financing. The simulations run on a top-tail adjusted version of the Household Financial Consumption Survey covering four countries: Finland, Germany, Ireland, and Italy. We find that, under some parameters, a UI would significantly reduce inequality and could be realistically financed by taxing the top 1%.

Suggested Citation

  • Guillem Vidal-Lorda & Andreas Thiemann & Leire Salazar & José A. Noguera, 2023. "Distributional and Financial Impact of Universal Inheritance in four European countries," JRC Working Papers on Social Classes in the Digital Age 2023-10, Joint Research Centre.
    • Handle: RePEc:ipt:dclass:202310
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC134659
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    Keywords

    Universal Inheritance; Wealth; Inequality; Simulation; Redistribution; Policy;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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