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Condorcet was wrong, Pareto was right: families, inheritance and inequality

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  • Cowell, Frank
  • Van de Gaer, Dirk

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 exists under standard assumptions and has a Pareto tail that 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 affect long-run inequality.

Suggested Citation

  • Cowell, Frank & Van de Gaer, Dirk, 2025. "Condorcet was wrong, Pareto was right: families, inheritance and inequality," LSE Research Online Documents on Economics 127769, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:127769
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    File URL: http://eprints.lse.ac.uk/127769/
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    References listed on IDEAS

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    More about this item

    Keywords

    inheritance; inheritance taxation; wealth distribution;
    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
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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