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Recent trends in the size and the distribution of inherited wealth in the UK

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  • Karagiannaki, Eleni

Abstract

In this paper we document the evolution of the annual flow of inheritances in the UK during the period 1984-2005 and provide estimates for the overall magnitude and the distribution of inherited wealth. Our results indicate that the period under examination the annual flow of inheritance increased markedly, from £22 billion in 1984 to £56 billion in 2005. The main drivers behind this increase were the rise in house prices and to a lesser extent the increase in the proportion of inheritances which included housing assets. Our results, based on analysis of survey data, show that the distribution of inheritances is characterized by a very high degree of inequality (comparable by and large to that observed in personal wealth) and that this has increased over time. However, the inequality increasing effect from the greater inequality in the distribution of inheritance was counterbalanced by the increase in the percentage of the population who received an inheritance. Our results also show that inheritance is positively associated with socio-economic status and that the disparities between groups became slightly more pronounced over time (mainly across educational groups). However, our evidence also shows that inheritance for the majority of recipients is fairly small and that large inheritances are limited to a very small minority of the population.

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  • Karagiannaki, Eleni, 2011. "Recent trends in the size and the distribution of inherited wealth in the UK," LSE Research Online Documents on Economics 43868, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:43868
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    File URL: http://eprints.lse.ac.uk/43868/
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    Cited by:

    1. Facundo Alvaredo & Bertrand Garbinti & Thomas Piketty, 2017. "On the Share of Inheritance in Aggregate Wealth: Europe and the USA, 1900–2010," Economica, London School of Economics and Political Science, vol. 84(334), pages 239-260, April.
    2. Anthony B. Atkinson, 2018. "Wealth and inheritance in Britain from 1896 to the present," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 137-169, June.
    3. repec:cep:sticas:/148 is not listed on IDEAS
    4. Karagiannaki, Eleni, 2011. "The impact of inheritance on the distribution of wealth: evidence from the UK," LSE Research Online Documents on Economics 43895, London School of Economics and Political Science, LSE Library.
    5. , Stone Center & Nolan, Brian & Palomino, Juan & Van Kerm, Philippe & Morelli, Salvatore, 2020. "Intergenerational Transfers by Size and Wealth Inequality in Rich Countries," SocArXiv eyh8s, Center for Open Science.
    6. Eleni Karagiannaki, 2011. "The impact of inheritance on the distribution of wealth: Evidence from the UK," CASE Papers case148, Centre for Analysis of Social Exclusion, LSE.
    7. Anita Tiefensee & Christian Westermeier, 2016. "Intergenerational Transfers and Wealth in the Euro-Area: The Relevance of Inheritances and Gifts in Absolute and Relative Terms," Discussion Papers of DIW Berlin 1556, DIW Berlin, German Institute for Economic Research.
    8. Alvaredo, Facundo & Garbinti, Bertrand & Piketty, Thomas, "undated". "On the Share of Inheritance in Aggregate Wealth Europe and the United States, 1900-2010," INET Oxford Working Papers 2015-07, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.

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    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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