Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?
- Edward N. WolffAffiliated withDepartment of Economics, New York University Email author
- , Maury GittlemanAffiliated withBureau of Labor Statistics
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Using data from the Survey of Consumer Finances (SCF), we found that on average over the period from 1989 to 2007, about one fifth of American households at a given point of time reported a wealth transfer and these accounted for quite a sizeable figure, about a quarter of their net worth. Over the lifetime, about 30 percent of households could expect to receive a wealth transfer and these would account for close to 40 % of their net worth near time of death. However, there is little evidence of an inheritance “boom.” In fact, from 1989 to 2007, the share of households reporting a wealth transfer fell by 2.5 percentage points, a time trend statistically significant at the one percent level. The average value of inheritances received among all households did increase but at a slow pace, by 10 %; the time trend is not statistically significant. Wealth transfers as a proportion of current net worth fell sharply over this period, from 29 to 19 %, though the time trend once again is not statistically significant. We also found that inheritances and other wealth transfers tend to be equalizing in terms of the distribution of household wealth, though a number of caveats apply to this result.
KeywordsInheritance Household wealth Inequality
JEL ClassificationD31 J1
- Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?
The Journal of Economic Inequality
Volume 12, Issue 4 , pp 439-468
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- Springer US
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