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Inheritances and the Distribution of Wealth Or Whatever Happened to the Great Inheritance Boom?

  • Edward N. Wolff

    ()

  • Maury Gittleman

    ()

We found that on average over the period from 1989 to 2007, 21 percent of American households at a given point of time received a wealth transfer and these accounted for 23 percent of their net worth. Over the lifetime, about 30 percent of households could expect to receive a wealth transfer and these would account for close to 40 percent of their net worth near time of death. However, there is little evidence of an inheritance ?boom.? In fact, from 1989 to 2007, the share of households reporting a wealth transfer fell by 2.5 percentage points. The average value of inheritances received among all households did increase but at a slow pace, by 10 percent, and wealth transfers as a proportion of current net worth fell sharply over this period from 29 to 19 percent or by 10 percentage points. We also found, somewhat surprisingly, that inheritances and other wealth transfers tend to be equalizing in terms of the distribution of household wealth. Indeed, the addition of wealth transfers to other sources of household wealth has had a sizeable effect on reducing the inequality of wealth.

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File URL: http://www.bcl.lu/fr/publications/cahiers_etudes/55/BCLWP055.pdf
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Paper provided by Central Bank of Luxembourg in its series BCL working papers with number 55.

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Length: 46 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:bcl:bclwop:bclwp055
Contact details of provider: Web page: http://www.bcl.lu/

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  5. Edward N. Wolff, 2007. "Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze," Economics Working Paper Archive wp_502, Levy Economics Institute.
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  7. PESTIEAU, Pierre, . "The role of gift and estate transfers in the United States and in Europe," CORE Discussion Papers RP -1606, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Piketty, Thomas, 2010. "On the Long Run Evolution of Inheritance - France 1820-2050," CEPR Discussion Papers 7854, C.E.P.R. Discussion Papers.
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  16. Tomes, Nigel, 1981. "The Family, Inheritance, and the Intergenerational Transmission of Inequality," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 928-58, October.
  17. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
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