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Inherited wealth over the path of development: Sweden, 1810–2010

Author

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  • Ohlsson, Henry

    () (Uppsala Center for Labor Studies)

  • Roine, Jesper

    () (SITE, Stockholm School of Economics)

  • Waldenström, Daniel

    () (Uppsala Center for Labor Studies)

Abstract

Inherited wealth has attracted much attention recently, much due to the research by Thomas Piketty (Piketty, 2011; 2014). The discussion has mainly revolved around a long-run contrast between Europe and the U.S., even though data on explicit historical inheritance flows are only really available for France and to some extent for the U.K. We study the long-run evolution of inherited wealth in Sweden over the past two hundred years. The trends in Sweden are similar to those in France and the U.K: beginning at a high level in the nineteenth century, falling sharply in the interwar era and staying low thereafter, but tending to increase in recent years. The levels, however, differ greatly. The Swedish flows were only half of those in France and the U.K. before 1900 and also much lower after 1980. The main reason for the low levels in the nineteenth century is that the capital-income ratio is much lower than in “Old Europe”. In fact, the Swedish capital-income ratio was similar to that in the U.S., but the savings and growth rates were much lower in Sweden than in the U.S. Rap-id income growth following industrialization and increasing savings rates were also important fac-tors behind the development of the capital-income ratio and the inheritance flow during the twenti-eth century. The recent differences in inheritance flows have several potential explanations related to the Swedish welfare state and pension system. Sweden was “un-European” during the nineteenth century because the country was so poor, Sweden is “un-European” today because so much wealth formation has taken place within the welfare state and the occupational pension systems.

Suggested Citation

  • Ohlsson, Henry & Roine, Jesper & Waldenström, Daniel, 2014. "Inherited wealth over the path of development: Sweden, 1810–2010," Working Paper Series, Center for Labor Studies 2014:7, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uulswp:2014_007
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    References listed on IDEAS

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    Cited by:

    1. Korom, Philipp, 2016. "Inherited advantage: The importance of inheritance for private wealth accumulation in Europe," MPIfG Discussion Paper 16/11, Max Planck Institute for the Study of Societies.
    2. Adermon, Adrian & Lindahl, Mikael & Waldenström, Daniel, 2016. "Intergenerational wealth mobility and the role of inheritance: Evidence from multiple generations," CEPR Discussion Papers 11456, C.E.P.R. Discussion Papers.
    3. Elinder, Mikael & Erixson, Oscar & Waldenström, Daniel, 2015. "Inheritance and wealth inequality: Evidence from population registers," Working Paper Series, Center for Fiscal Studies 2015:3, Uppsala University, Department of Economics.
    4. 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.
    5. Waldenström, Daniel, 2015. "Wealth-income ratios in a small, late-industrializing, welfare-state economy: Sweden, 1810–2014," Working Paper Series, Center for Fiscal Studies 2015:6, Uppsala University, Department of Economics.
    6. Sanna Nivakoski, 2015. "The Exchange Motive in Intergenerational Transfers," Working Papers 201510, Geary Institute, University College Dublin.
    7. Elinder, Mikael & Erixson, Oscar & Escobar, Sebastian & Ohlsson, Henry, 2014. "Estates, bequests, and inheritances in Sweden - A look into the Belinda databases," Working Paper Series, Center for Fiscal Studies 2014:14, Uppsala University, Department of Economics.
    8. Waldenström, Daniel, 2015. "Wealth-Income Ratios in a Small, Late-Industrializing, Welfare-State Economy: Sweden, 1810–2014," IZA Discussion Papers 9408, Institute for the Study of Labor (IZA).
    9. repec:eee:poleco:v:52:y:2018:i:c:p:85-102 is not listed on IDEAS
    10. Waldenström, Daniel, 2015. "Wealth-income ratios in a small, late-industrializing, welfare-state economy: Sweden, 1810–2014," Working Paper Series 2015:4, Uppsala University, Department of Economics.
    11. Abraham, Martin & Lorek, Kerstin & Richter, Friedemann & Wrede, Matthias, 2014. "Strictness of tax compliance norms: A factorial survey on the acceptance of inheritance tax evasion in Germany," FAU Discussion Papers in Economics 07/2014, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    12. Waldenström, Daniel, 2015. "The National Wealth of Sweden, 1810–2014," CEPR Discussion Papers 10882, C.E.P.R. Discussion Papers.
    13. Waldenström, Daniel, 2015. "The National Wealth of Sweden, 1810–2014," Working Paper Series 2015:3, Uppsala University, Department of Economics.
    14. Sommer, Eric, 2017. "Wealth Transfers and Tax Planning: Evidence for the German Bequest Tax," IZA Discussion Papers 11120, Institute for the Study of Labor (IZA).
    15. Magnus Henrekson & Daniel Waldenström, 2016. "Inheritance taxation in Sweden, 1885–2004: the role of ideology, family firms, and tax avoidance," Economic History Review, Economic History Society, vol. 69(4), pages 1228-1254, November.
    16. Waldenström, Daniel, 2015. "The National Wealth of Sweden, 1810–2014," Working Paper Series 1088, Research Institute of Industrial Economics.
    17. Waldenström, Daniel, 2015. "Wealth-income ratios in a small, late-industrializing, welfare-state economy: Sweden, 1810–2014," CEPR Discussion Papers 10878, C.E.P.R. Discussion Papers.
    18. Waldenström, Daniel, 2015. "The National Wealth of Sweden, 1810–2014," Working Paper Series, Center for Fiscal Studies 2015:5, Uppsala University, Department of Economics.
    19. Waldenström, Daniel, 2016. "Wealth-Income Ratios in a Small, Developing Economy: Sweden, 1810–2014," Working Paper Series 1134, Research Institute of Industrial Economics.

    More about this item

    Keywords

    inheritance; capital accumulation; inverse mortality multiplier;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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