The Journal of Economic Inequality

, Volume 12, Issue 4, pp 439–468 | Cite as

Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?

  • Edward N. WolffEmail author
  • Maury Gittleman


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.


Inheritance Household wealth Inequality 

JEL Classification

D31 J1 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Altonji, J.G., Hayashi, F., Kotlikoff, L.J.: Parental altruism and Inter Vivos transfers: theory and evidence. J. Polit. Econ. 105(6), 121–1166 (1997)CrossRefGoogle Scholar
  2. 2.
    Alvaredo, F., Sandholt Jensen, P., Sharp, P.R.: Inheritance and wealth in Denmark. (forthcoming)Google Scholar
  3. 3.
    Avery, R.B., Rendall, M.S.: Estimating the size and distribution of baby boomers’ prospective inheritances. In: American Statistical Association’s 1993 Proceedings of the Social Statistics Section, pp. 11–19 (1993)Google Scholar
  4. 4.
    Barlow, R., Brazer, H.E., Morgan, J.N.: Economic Behavior of the Affluent. Brookings Institution, Washington (1966)Google Scholar
  5. 5.
    Barro, R.J.: Are government bonds net wealth. J. Polit. Econ. 82(6), 1095–1117 (1974)CrossRefGoogle Scholar
  6. 6.
    Becker, G.S.: A theory of social interactions. J. Polit. Econ. 82(6), 1063–1093 (1974)CrossRefGoogle Scholar
  7. 7.
    Becker, G.S., Tomes, N.: An equilibrium theory of the distribution of income and intergenerational mobility. J. Polit. Econ. 87(6), 1153–1189 (1979)CrossRefGoogle Scholar
  8. 8.
    Bernheim, D.B., Shleifer, A., Summers, L.H.: The strategic bequest motive. J. Polit. Econ. 93, 1045–1076 (1985)CrossRefGoogle Scholar
  9. 9.
    Beverly, S., Sherraden, M., Cramer, R., Williams Shanks, T.R., Nam, Y., Zhan, M.: Determinants of asset holdings. In: McKernan, S., Sherraden, M. (eds.) Asset Building and Low-Income Families, pp. 89–152. Urban Institute Press, Washington (2008)Google Scholar
  10. 10.
    Brown, J.R., Weisbenner, S.J.: Is a bird in hand worth more than a bird in the bush? Intergenerational transfers and savings behavior. NBER Working Paper No. 8753 (2002)Google Scholar
  11. 11.
    Coe, N.B., Webb, A.: Actual and anticipated inheritance receipts. Available at SSRN: (2009)
  12. 12.
    Cox, D.: Motives for private income transfers. J. Polit. Econ. 95(3), 509–546 (1987)CrossRefGoogle Scholar
  13. 13.
    Cox, D.: Intergenerational transfers and liquidity constraints. Q. J. Econ. 104, 187–218 (1990)CrossRefGoogle Scholar
  14. 14.
    Cox, D., Jappelli, T.: Credit rationing and private transfers: evidence from survey data. Rev. Econ. Stat. 72(3), 445–154 (1990)CrossRefGoogle Scholar
  15. 15.
    Cox, D., Rank, M.R.: Inter-Vivos transfers and intergenerational exchange. Rev. Econ. Stat. 74(2), 305–314 (1992)CrossRefGoogle Scholar
  16. 16.
    Davies, J.B.: Does redistribution reduce inequality. J. Labor Econ. 4, 538–559 (1986)CrossRefGoogle Scholar
  17. 17.
    Davies, J.B., Shorrocks, A.F.: The distribution of wealth. In: Atkinson, A.B., Bourguignon, F. (eds.) Handbook on Income Distribution, vol. 1, pp. 605–675. Elsevier, New York (2000)CrossRefGoogle Scholar
  18. 18.
    Dynan, K.E., Skinner, J., Zeldes, S.P.: The importance of bequests and life-cycle saving in capital accumulation: a new answer. Am. Econ. Rev. 92(2), 274–278 (2002)CrossRefGoogle Scholar
  19. 19.
    Dynan, K.E., Skinner, J., Zeldes, S.P.: Do the rich save more. J. Polit. Econ. 112, 397–444 (2004)CrossRefGoogle Scholar
  20. 20.
    Frank, R.: Did the Forbes 400 billionaires really ‘build that’? CNBC, available at: (2012)
  21. 21.
    Gale, W.G., Scholz, J.K.: Intergenerational transfers and the accumulation of wealth. J. Econ. Perspect. 8, 145–160 (1994)CrossRefGoogle Scholar
  22. 22.
    Hurd, M.D., Mundaca, G.: The importance of gifts and inheritances among the affluent. In: Lipsey, R.E., Stone Tice, H. (eds.) The Measurement of Saving, Investment, and Wealth, Studies of Income and Wealth 52, pp. 737–763. Chicago University Press, Chicago (1989)Google Scholar
  23. 23.
    Kennickell, A.B.: Modeling wealth with multiple observations of income: redesign of the sample for the 2001 survey of consumer finances. October, (2001)
  24. 24.
    Kessler, D., Masson, A.: Bequests and wealth accumulation: are some pieces of the puzzle missing. J. Econ. Perspect. 3, 141–152 (1989)CrossRefGoogle Scholar
  25. 25.
    Klevmarken, N.A.: On the wealth dynamics of swedish families 1984–1998, paper presented at the 21st Arne Ryde symposium on non-human wealth and capital accumulation, August 23–25. Lund, Sweden (2001)Google Scholar
  26. 26.
    Kopczuk, W., Lupton, J.P.: To leave or not to leave: the distribution of bequest motives. Rev. Econ. Stud. 74, 207–235 (2007)CrossRefGoogle Scholar
  27. 27.
    Laferrere, A., Wolff, F.-C.: Microeconomic models of family transfers. In: Kolm, S.-C., Ythier, J.M. (eds.) Handbook on the Economics of Giving, Reciprocity and Altruism, vol. 2, pp. 889–969. North Holland, Amsterdam (2006)Google Scholar
  28. 28.
    Laitner, J.: Random earnings differences, lifetime liquidity constraints, and altruistic intergenerational transfers. J. Econ. Theory 58, 135–170 (1992)CrossRefGoogle Scholar
  29. 29.
    Laitner, J., Sonnega, A.: Intergenerational Transfers in the Health and Retirement Study Data. Michigan Retirement Research Center, Ann Arbor (2010)Google Scholar
  30. 30.
    Menchik, P., David, M.: Income distribution, lifetime saving and bequests. Am. Econ. Rev. 73, 673–690 (1983)Google Scholar
  31. 31.
    McGarry, K., Schoeni, R.F.: Transfer behavior in the health and retirement study: measurement and the redistribution of resources within the family. J. Hum. Res. 30(s), S184–S226 (1995)CrossRefGoogle Scholar
  32. 32.
    Morgan, J.N., David, M.H., Cohen, W.J., Brazer, H.E.: Income and Welfare in the United States. McGraw-Hill, New York (1962)Google Scholar
  33. 33.
    Oulton, N.: Inheritance and the distribution of wealth. Oxf. Econ. Pap. 28, 86–101 (1976)Google Scholar
  34. 34.
    Piketty, T.: On the long-run evolution of inheritance: France 1820–2050. Q. J. Econ. 126(3), 1071–1131 (2011)CrossRefGoogle Scholar
  35. 35.
    Projector, D., Weiss, G.: Survey of Financial Characteristics of Consumers. Federal Reserve Technical Papers (1966)Google Scholar
  36. 36.
    Schervish, P.G., Havens, J.J.: Millionaires and the Millennium: New Estimates of the Forthcoming Wealth Transfer and the Prospects for a Golden Age of Philanthropy. Social Welfare Research Institute of Boston College, Boston (1999)Google Scholar
  37. 37.
    Schoeni, R.F.: Private interhousehold transfers of money and time: new empirical evidence. Rev. Income Wealth 43(4), 423–448 (1997)CrossRefGoogle Scholar
  38. 38.
    Tomes, N.: The family, inheritance, and the intergenerational transmission of inequality. J. Polit. Econ. 89(5), 928–958 (1981)CrossRefGoogle Scholar
  39. 39.
    Wilhelm, M.O.: The role of intergenerational transfers in spreading asset ownership. In: Shapiro, T.M., Wolff, E.N. (eds.) Assets for the Poor: The Benefits of Spreading Asset Ownership, pp. 132–161. Russell Sage Foundation, New York (2001)Google Scholar
  40. 40.
    Wolff, E.N.: Wealth accumulation by age cohort in the U.S., 1962–1992: the role of savings, capital gains and intergenerational transfers. Geneva Pap. Risk Insur. 24, 27–49 (1999)CrossRefGoogle Scholar
  41. 41.
    Wolff, E.N.: The impact of gifts and bequests on the distribution of wealth. In: Munnell, A.H., Sundén, A. (eds.) Death and Dollars, pp. 345–375. Brookings Institution, Washington (2003)Google Scholar
  42. 42.
    Wolff, E.N.: Recent trends in household wealth in the United States: rising debt and the middle-class squeeze – an update to 2007. Annandale-on-the Hudson, NY: Levy Economics Institute Working Paper No. 589 (2010)Google Scholar
  43. 43.
    Wolff, E.N., Gittleman, M.: Inheritances and the distribution of wealth or whatever happened to the great inheritance boom? Results from the SCF and PSID. NBER Working Paper No. 16840 (2011)Google Scholar
  44. 44.
    Wolff, E.N., Zacharias, A., Masterson, T.: Trends in American living standards and inequality, 1959–2004. Annandale-on the Hudson, NY: Levy Economics Institute, mimeo (2009)Google Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Department of EconomicsNew York UniversityNew YorkUSA
  2. 2.Bureau of Labor StatisticsWashingtonUSA

Personalised recommendations