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Drivers of wealth inequality in euro area countries: the effect of inheritance and gifts on household gross and net wealth distribution analysed by applying the Shapley value approach to decomposition

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  • Sebastian Leitner

    (The Vienna Institute for International Economic Studies (wiiw), Vienna, Austria)

Abstract

This paper investigates the sources of inequality in household gross and net wealth across eight euro area countries applying the Shapley value approach to decomposition. The research draws on micro data from the Eurosystem Household Finance and Consumption Survey 2010. Dispersion in bequests and inter vivos transfers obtained by households are found to have a remarkable effect on wealth inequality that is stronger than that of income differences. In Austria, Germany and Cyprus the contribution of real and financial assets inherited or received as gifts to gross and net wealth inequality attains about 40 per cent. Nevertheless, the distribution of household characteristics (age, education, size, number of adults and children in the household, marital status) within countries also shapes the observed wealth dispersion.

Suggested Citation

  • Sebastian Leitner, 2016. "Drivers of wealth inequality in euro area countries: the effect of inheritance and gifts on household gross and net wealth distribution analysed by applying the Shapley value approach to decomposition," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 13(1), pages 114-136, April.
    • Handle: RePEc:elg:ejeepi:v:13:y:2016:i:1:p114-136
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    Citations

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    Cited by:

    1. Pedro Salas-Rojo & Juan Gabriel Rodríguez, 2021. "The distribution of wealth in Spain and the USA: the role of socioeconomic factors," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(3), pages 389-421, September.
    2. Stefan Jestl, 2021. "Inheritance tax regimes: a comparison," Public Sector Economics, Institute of Public Finance, vol. 45(3), pages 363-385.
    3. Stefan Jestl & Sandra M. Leitner & Sebastian Leitner, 2022. "The relative impact of different forces of globalization on wage inequality: A fresh look at the EU experience," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1003-1037, September.
    4. Stefan Jestl, 2018. "Inheritance tax regimes," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 176, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    5. Pirmin Fessler & Peter Lindner & Martin Schürz, 2016. "In focus: Eurosystem Household Finance and Consumption Survey 2014 – first results for Austria (second wave)," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 34-95.
    6. Sebastian Leitner, 2018. "Factors driving wealth inequality in European countries," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 177, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    7. Boarini, Romina & Causa, Orsetta & Fleurbaey, Marc & Grimalda, Gianluca & Woolard, Ingrid, 2018. "Reducing inequalities and strengthening social cohesion through inclusive growth: A roadmap for action," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-26.
    8. Stefan Jestl, 2018. "Inheritance Tax Regimes: A Comparison," wiiw Working Papers 152, The Vienna Institute for International Economic Studies, wiiw.
    9. Stefan Humer & Mathias Moser & Matthias Schnetzer, 2017. "Inheritances and the Accumulation of Wealth in the Eurozone," ICAE Working Papers 73, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.

    More about this item

    Keywords

    inequality; wealth distribution; decomposition analysis; inheritance; inter vivos transfers; income distribution; Europe;
    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
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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