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On the Long-Run Evolution of Inheritance: France 1820-2050

Author

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  • Thomas Piketty

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

This article attempts to document and account for the long-run evolution of inheritance. We find that in a country like France the annual flow of inheritance was about 20-25% of national income between 1820 and 1910, down to less than 5% in 1950, and back up to about 15% by 2010. A simple theoretical model of wealth accumulation, growth, and inheritance can fully account for the observed U-shaped pattern and levels. Using this model, we find that under plausible assumptions the annual bequest flow might reach about 20-25% of national income by 2050. This corresponds to a capitalized bequest share in total wealth accumulation well above 100%. Our findings illustrate the fact that when the growth rate g is small, and when the rate of return to private wealth r is permanently and substantially larger than the growth rate (say, r = 4-5% versus g = 1-2%), which was the case in the nineteenth century and early twentieth century and is likely to happen again in the twenty-first century, then past wealth and inheritance are bound to play a key role for aggregate wealth accumulation and the structure of lifetime inequality. Contrary to a widespread view, modern economic growth did not kill inheritance.

Suggested Citation

  • Thomas Piketty, 2011. "On the Long-Run Evolution of Inheritance: France 1820-2050," PSE-Ecole d'économie de Paris (Postprint) halshs-00754528, HAL.
  • Handle: RePEc:hal:pseptp:halshs-00754528
    DOI: 10.1093/qje/qjr020
    Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/halshs-00754528
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