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Condorcet was Wrong, Pareto was Right: Families, Inheritance and Inequality

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  • Frank Cowell
  • Dirk Van de gaer

Abstract

Using a simple model of family decision making we examine the processes by which the wealth distribution changes over the generations, focusing in particular on the division of fortunes through inheritance and the union of fortunes through marriage. We show that the equilibrium wealth distribution can be characterized in a simple way for a variety of inheritance rules and marriage patterns. The shape of the distribution is principally determined by the size distribution of families. We show how changes in fertility, inheritance rules and inheritance taxation a ect long-run inequality.

Suggested Citation

  • Frank Cowell & Dirk Van de gaer, 2017. "Condorcet was Wrong, Pareto was Right: Families, Inheritance and Inequality," STICERD - Public Economics Programme Discussion Papers 34, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  • Handle: RePEc:cep:stippp:34
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    File URL: http://sticerd.lse.ac.uk/dps/pep/pep34.pdf
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    References listed on IDEAS

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    1. Condorcet was Wrong, Pareto was Right: Families, Inheritance and Inequality
      by maximorossi in NEP-LTV blog on 2018-02-20 19:22:35

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    Cited by:

    1. Sarah Kuypers & Francesco Figari & Gerlinde Verbist, 2020. "An assessment of wealth taxes in a joint income-wealth perspective," Working Papers 2006, Herman Deleeck Centre for Social Policy, University of Antwerp.
    2. Frank A. Cowell & Dirk Van de gaer & Chang He, 2018. "Inheritance Taxation: Redistribution and Predistribution," Research on Economic Inequality, in: John A. Bishop & Juan Gabriel Rodríguez (ed.), Inequality, Taxation and Intergenerational Transmission, volume 26, pages 1-13, Emerald Publishing Ltd.

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    More about this item

    Keywords

    wealth distribution; inheritance; inheritance taxation;
    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

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    This paper has been announced in the following NEP Reports:

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