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Wealth inequality, intergenerational transfers and socioeconomic background

Author

Listed:
  • Juan C. Palomino

    (University of Oxford)

  • Gustavo A. Marrero

    (Universidad de la Laguna)

  • Brian Nolan

    (University of Oxford)

  • Juan G. Rodriguez

    (Universidad Complutense de Madrid)

Abstract

This paper estimates the contribution of intergenerational transfers (inheritances and gifts) and socioeconomic background to wealth inequality in four OECD countries: France, Spain, Great Britain and the United States. We generate a non-parametric counterfactual distribution where all differences in wealth associated with the intergenerational transfers received and the socioeconomic background have been removed. Despite the diversity of the four countries analysed, we find similar patterns in the results. The combined contribution of intergenerational transfers and socioeconomic background to wealth inequality is sizeable in all four countries studied, ranging from 37% in Great Britain to 48% in the US. When interactions between the two factors are controlled for, the net contribution of inheritances and gifts is between 23% and 30%, while the net contribution of family background lies between 4\% and 11\%. These values are substantial and reveal that the importance of intergenerational transfers in all these countries is at least twice that of socioeconomic background.

Suggested Citation

  • Juan C. Palomino & Gustavo A. Marrero & Brian Nolan & Juan G. Rodriguez, 2020. "Wealth inequality, intergenerational transfers and socioeconomic background," Working Papers 537, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2020-537
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    3. Ricky Kanabar & Paul Gregg, 2021. "Intergenerational wealth transmission in Great Britain," CEPEO Working Paper Series 21-06, UCL Centre for Education Policy and Equalising Opportunities, revised Apr 2021.
    4. Pérez-Mesa, David & Marrero, Gustavo A. & Darias-Curvo, Sara, 2021. "Child health inequality in Sub-Saharan Africa," MPRA Paper 108801, University Library of Munich, Germany.

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    More about this item

    Keywords

    Wealth; Inheritances; Inequality; France; Spain; Great Britain; United States.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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