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Intergenerational wealth mobility and the role of inheritance: Evidence from multiple generations

Author

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  • Adermon, Adrian

    (IFAU; Department of Economics, Uppsala University)

  • Lindahl, Mikael

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Waldenström, Daniel

    (Paris School of Economics and Research Institute of Industrial Economics (IFN), CEPR, IZA, UCLS and UCFS)

Abstract

This study estimates intergenerational correlations in mid-life wealth across three generations, and a young fourth generation, and examines how much of the parent-child association that can be explained by inheritances. Using a Swedish data set we find parent-child rank correlations of 0.3–0.4 and grandparents- grandchild rank correlations of 0.1–0.2. Conditional on parents’ wealth, grandparents’ wealth is weakly positively associated with grandchild’s wealth and the parent-child correlation is basically unchanged if we control for grandparents’ wealth. Bequests and gifts strikingly account for at least 50 per cent of the parent-child wealth correlation while earnings and education are only able to explain 25 per cent.

Suggested Citation

  • Adermon, Adrian & Lindahl, Mikael & Waldenström, Daniel, 2016. "Intergenerational wealth mobility and the role of inheritance: Evidence from multiple generations," Working Papers in Economics 670, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0670
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    More about this item

    Keywords

    multigenerational mobility; bequests; mid-life wealth;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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