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

  • Edward N. Wolff

    ()

    (New York University)

  • Maury Gittleman

    ()

    (U.S. Bureau of Labor Statistics)

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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Paper provided by U.S. Bureau of Labor Statistics in its series Working Papers with number 445.

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Length: 40 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:bls:wpaper:ec110030
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  1. W. G. Gale & J. K. Scholz, . "Intergenerational transfers and the accumulation of wealth," Institute for Research on Poverty Discussion Papers 1019-93, University of Wisconsin Institute for Research on Poverty.
  2. Edward N. Wolff & Ajit Zacharias & Thomas Masterson, 2012. "Trends In American Living Standards And Inequality, 1959–2007," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(2), pages 197-232, 06.
  3. 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).
  4. Kessler, Denis & Masson, Andre, 1989. "Bequest and Wealth Accumulation: Are Some Pieces of the Puzzle Missing?," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 141-52, Summer.
  5. Klevmarken, N. Anders, 2001. "On the Wealth Dynamics of Swedish Families 1984-1998," Working Paper Series 2001:17, Uppsala University, Department of Economics.
  6. Laitner, John, 1992. "Random earnings differences, lifetime liquidity constraints, and altruistic intergenerational transfers," Journal of Economic Theory, Elsevier, vol. 58(2), pages 135-170, December.
  7. Jeffrey Brown & Scott Weisbenner, 2004. "Intergenerational Transfers and Savings Behavior," NBER Chapters, in: Perspectives on the Economics of Aging, pages 181-204 National Bureau of Economic Research, Inc.
  8. Menchik, Paul L & David, Martin, 1983. "Income Distribution, Lifetime Savings, and Bequests," American Economic Review, American Economic Association, vol. 73(4), pages 672-90, September.
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