Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/89396.html
   My bibliography  Save this paper

Wealth and inheritance in Britain from 1896 to the present

Author

Listed:
  • Atkinson, Anthony B.
Abstract
Personal wealth has grown since the 1970s twice as fast in real terms as national income. Has this rise in the wealth-income ratio led to a corresponding increase in the wealth being passed on from one generation to the next? Are we returning to the levels of inheritance found in the 19th century? The aim of this paper is to construct UK evidence on the extent of the transmission of wealth in the form of estates and gifts inter vivos. It takes a long-run view of inheritance, starting from 1896, when the modern Estate Duty was introduced, and exploits the extensive estate data published over the years. Construction of a long-run time series for more than a century is challenging, and there are important limitations. The resulting time-series demonstrates the major importance of inheritance in the UK before the First World War, when the total transmitted wealth represented some 20 per cent of net national income. In the inter-war period, the total was around 15 per cent, falling to some 10 per cent after the Second World War, and then falling further to below 5 per cent in the late 1970s. Since then, there has indeed been an upturn: a rise from 4.8 per cent in 1977 to 8.2 per cent in 2006. This increase was more or less in line with the increase in personal wealth, and has to be interpreted in the light of the changing net worth of the corporate and public sectors of the economy.

Suggested Citation

  • Atkinson, Anthony B., 2018. "Wealth and inheritance in Britain from 1896 to the present," LSE Research Online Documents on Economics 89396, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:89396
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/89396/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Thomas Piketty, 2011. "On the Long-Run Evolution of Inheritance: France 1820--2050," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1071-1131.
    2. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
    3. Anthony B. Atkinson & Salvatore Morelli, 2014. "Chartbook of economic inequality," Working Papers 324, ECINEQ, Society for the Study of Economic Inequality.
    4. Edward N. Wolff & Maury Gittleman, 2011. "Inheritances and the Distribution of Wealth or Whatever Happened to the Great Inheritance Boom? Results from the SCF and PSID," NBER Working Papers 16840, National Bureau of Economic Research, Inc.
    5. Alvaredo, Facundo & Atkinson, Anthony B. & Morelli, Salvatore, 2018. "Top wealth shares in the UK over more than a century," Journal of Public Economics, Elsevier, vol. 162(C), pages 26-47.
    6. Hills, John & Bastagli, Francesca & Cowell, Frank & Glennerster, Howard & Karagiannaki, Eleni & McKnight, Abigail, 2013. "Wealth distribution, accumulation and policy," LSE Research Online Documents on Economics 51284, London School of Economics and Political Science, LSE Library.
    7. Karagiannaki, Eleni, 2011. "Recent trends in the size and the distribution of inherited wealth in the UK," LSE Research Online Documents on Economics 43868, London School of Economics and Political Science, LSE Library.
    8. repec:cep:sticas:/146 is not listed on IDEAS
    9. Anthony B. Atkinson & Peter G. Backus & John Micklewright, 2017. "Charitable Bequests and Wealth At Death," Economic Journal, Royal Economic Society, vol. 127(605), pages 1-23, October.
    10. Edward Wolff & Maury Gittleman, 2014. "Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(4), pages 439-468, December.
    11. Atkinson, Anthony B & Gordon, James P F & Harrison, Alan, 1989. "Trends in the Shares of Top Wealth-Holders in Britain, 1923-1981," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(3), pages 315-332, August.
    12. A. T. Dunn & P. D. R. B. Hoffman, 1983. "Distribution Of Wealth In The United Kingdom: Effect Of Including Pension Rights, And Analysis By Age‐Group," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 29(3), pages 243-282, September.
    13. David Blake & J. Michael Orszag, 1999. "Annual estimates of personal wealth holdings in the United Kingdom since 1948," Applied Financial Economics, Taylor & Francis Journals, vol. 9(4), pages 397-421.
    14. Anthony B. Atkinson & Peter G. Backus & John Micklewright, 2017. "Charitable Bequests and Wealth At Death," Economic Journal, Royal Economic Society, vol. 127(605), pages 1-23, October.
    15. Whalley John, 1974. "Estate Duty as a "Voluntary" Tax; Evidence from Stamp Duty Statistics," Economic Journal, Royal Economic Society, vol. 84(335), pages 638-644, September.
    16. Stephen Wright, 2004. "Measures Of Stock Market Value And Returns For The U.S. Nonfinancial Corporate Sector, 1900–2002," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(4), pages 561-584, December.
    17. repec:bla:revinw:v:29:y:1983:i:3:p:243-82 is not listed on IDEAS
    18. Horsman, E G, 1975. "The Avoidance of Estate Duty by Gifts Inter Vivos: Some Quantitative Evidence," Economic Journal, Royal Economic Society, vol. 85(339), pages 516-530, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:cep:sticas:/178 is not listed on IDEAS
    2. Cummins, Neil, 2024. "Ethnic Wealth Inequality in England and Wales, 1858-2018," CEPR Discussion Papers 19398, C.E.P.R. Discussion Papers.
    3. Cummins, Neil & Ó Gráda, Cormac, 2022. "The Irish in England," Economic History Working Papers 115497, London School of Economics and Political Science, Department of Economic History.
    4. Cummins, Neil & Ó Gráda, Cormac, 2022. "The Irish in England," Economic History Working Papers 115497, London School of Economics and Political Science, Department of Economic History.
    5. Mathä, Thomas Y. & Porpiglia, Alessandro & Ziegelmeyer, Michael, 2017. "Household wealth in the euro area: The importance of intergenerational transfers, homeownership and house price dynamics," Journal of Housing Economics, Elsevier, vol. 35(C), pages 1-12.
    6. Edward Wolff & Maury Gittleman, 2014. "Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(4), pages 439-468, December.
    7. Salvatore Morelli, 2020. "The Dynamics of Wealth Concentration: Thoughts on Tony Atkinson’s Contributions," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(1), pages 197-205, March.
    8. Mauricio De Rosa, 2022. "Accumulation, inheritance and wealth distribution: first estimates of the untold half," Documentos de Trabajo (working papers) 22-07, Instituto de Economía - IECON.
    9. 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.
    10. Brian Nolan & Juan Palomino & Philippe Van Kerm & Salvatore Morelli, 2020. "Intergenerational Transfers by Size and Wealth Inequality in Rich Countries," CSEF Working Papers 578, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    11. Brunner Johann K., 2014. "Die Erbschaftsteuer – Bestandteil eines optimalen Steuersystems?," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(3), pages 199-218, October.
    12. 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.
    13. Adrian Adermon & Mikael Lindahl & Daniel Waldenström, 2018. "Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations," Economic Journal, Royal Economic Society, vol. 128(612), pages 482-513, July.
    14. Pirmin Fessler & Martin Schürz, 2018. "Private Wealth Across European Countries: The Role of Income, Inheritance and the Welfare State," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 19(4), pages 521-549, October.
    15. Anthony Atkinson, 2013. "Reducing income inequality in Europe," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-11, December.
    16. Alvaredo, Facundo & Atkinson, Anthony B. & Morelli, Salvatore, 2018. "Top wealth shares in the UK over more than a century," Journal of Public Economics, Elsevier, vol. 162(C), pages 26-47.
    17. Eleni Karagiannaki, 2011. "The impact of inheritance on the distribution of wealth: Evidence from the UK," CASE Papers case148, Centre for Analysis of Social Exclusion, LSE.
    18. Elinder, Mikael & Erixson, Oscar & Waldenström, Daniel, 2018. "Inheritance and wealth inequality: Evidence from population registers," Journal of Public Economics, Elsevier, vol. 165(C), pages 17-30.
    19. Ursina Kuhn, 2020. "Augmented wealth in Switzerland: the influence of pension wealth on wealth inequality," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 156(1), pages 1-16, December.
    20. Kacper Grejcz & Zbigniew Żółkiewski, 2017. "Household wealth in Poland: the results of a new survey of household finance," Bank i Kredyt, Narodowy Bank Polski, vol. 48(3), pages 295-326.
    21. Paolo Acciari & Facundo Alvaredo & Salvatore Morelli, 2024. "The Concentration of Personal Wealth in Italy 1995–2016," Journal of the European Economic Association, European Economic Association, vol. 22(3), pages 1228-1274.

    More about this item

    JEL classification:

    • N0 - Economic History - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:89396. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.