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Born with a Silver Spoon? Danish Evidence on Wealth Inequality in Childhood

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  • Simon Halphen Boserup
  • Wojciech Kopczuk
  • Claus Thustrup Kreiner

Abstract

We use Danish wealth records from three decades to characterise wealth inequality in childhood, where the main source of wealth is transfers. Wealth holdings are small in childhood but they have strong predictive power for future wealth in adulthood. At age 18, asset holdings of children are more informative than parental wealth in predicting wealth of children when they are in their 40s. We investigate why and rule out that childhood wealth in itself can accumulate enough to explain later wealth inequality. Instead, childhood wealth seems to proxy for intergenerational correlation in savings behaviour and additional transfers from parents.

Suggested Citation

  • Simon Halphen Boserup & Wojciech Kopczuk & Claus Thustrup Kreiner, 2018. "Born with a Silver Spoon? Danish Evidence on Wealth Inequality in Childhood," Economic Journal, Royal Economic Society, vol. 128(612), pages 514-544, July.
  • Handle: RePEc:wly:econjl:v:128:y:2018:i:612:p:f514-f544
    DOI: 10.1111/ecoj.12496
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    Cited by:

    1. Bastani, Spencer & Waldenström, Daniel, 2018. "How Should Capital Be Taxed? Theory and Evidence from Sweden," IZA Discussion Papers 11475, Institute of Labor Economics (IZA).
    2. Carsten Andersen, 2019. "Intergenerational Health Mobility: Evidence from Danish Registers," Economics Working Papers 2019-04, Department of Economics and Business Economics, Aarhus University.
    3. Spencer Bastani & Daniel Waldenström, 2019. "Salience of Inherited Wealth and the Support for Inheritance Taxation," Working Papers hal-02877003, HAL.
    4. Annette Alstadsæter & Niels Johannesen & Gabriel Zucman, 2019. "Tax Evasion and Inequality," American Economic Review, American Economic Association, vol. 109(6), pages 2073-2103, June.
    5. Thomas Epper & Ernst Fehr & Helga Fehr-Duda & Claus Thustrup Kreiner & David Dreyer Lassen & Søren Leth-Petersen & Gregers Nytoft Rasmussen, 2020. "Time Discounting and Wealth Inequality," American Economic Review, American Economic Association, vol. 110(4), pages 1177-1205, April.
    6. Spencer Bastani & Daniel Waldenström, 2019. "Salience of Inherited Wealth and the Support for Inheritance Taxation," CESifo Working Paper Series 7482, CESifo.
    7. Spencer Bastani & Daniel Waldenström, 2019. "Salience of Inherited Wealth and the Support for Inheritance Taxation," World Inequality Lab Working Papers hal-02877003, HAL.
    8. Spencer Bastani & Daniel Waldenström, 2018. "How should capital be taxed? The Swedish experience," Working Papers hal-02878153, HAL.
    9. Güell, Maia & Rodríguez Mora, José Vicente & Solon, Gary, 2018. "New Directions in Measuring Intergenerational Mobility," CEPR Discussion Papers 12959, C.E.P.R. Discussion Papers.
    10. Spencer Bastani & Daniel Waldenström, 2018. "How should capital be taxed? The Swedish experience," World Inequality Lab Working Papers hal-02878153, HAL.

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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