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The (Un)Importance of Inheritance

Author

Listed:
  • Sandra Black
  • Paul Devereux
  • Fanny Landaud

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université, CNRS - Centre National de la Recherche Scientifique)

  • Kjell Salvanes
Abstract
Transfers from parents—either in the form of gifts or inheritances—have received much attention as a source of inequality. This paper uses a 19-year panel of administrative data for the population of Norway to examine the share of the Total Inflows available to an individual (defined as the capitalized sum of net labor income, government transfers, and gifts and inheritances received over the period) accounted for by capitalized gifts and inheritances. Perhaps surprisingly, we find that gifts and inheritances represent a small share of Total Inflows; this is true across the distribution of Total Inflows, as well as at all levels of net wealth at a point in time. Gifts and inheritances are only an important source of income flows among those who have very wealthy parents. Additionally, gifts and inheritances have very little effect on the distribution of Total Inflows – when we do a counterfactual Total Inflows distribution with zero gifts and inheritances, it is not much different from the actual distribution. Our findings suggest that inheritance taxes may do little to mitigate the extreme wealth inequality in society.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Sandra Black & Paul Devereux & Fanny Landaud & Kjell Salvanes, 2022. "The (Un)Importance of Inheritance," Working Papers hal-04322162, HAL.
    • Handle: RePEc:hal:wpaper:hal-04322162
    DOI: 10.2139/ssrn.4114565
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    Cited by:

    1. Lu, Kelin, 2024. "Silver Spoons and Scales of Justice: The Fairness Preference over Unequal Intergenerational Wealth Transfers," MPRA Paper 121451, University Library of Munich, Germany.
    2. Brian Nolan & Juan C. Palomino & Philippe Van Kerm & Salvatore Morelli, 2022. "Intergenerational wealth transfers in Great Britain from the Wealth and Assets Survey in comparative perspective," Fiscal Studies, John Wiley & Sons, vol. 43(2), pages 179-199, June.
    3. Häner-Müller, Melanie & Salvi, Michele & Schaltegger, Christoph A., 2024. "Marry into new or old money? The distributional impact of marital decisions from an intergenerational perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 672-687.
    4. Margit Schratzenstaller, 2023. "Behavioral Responses to Inheritance Taxation. A Review of the Empirical Literature," WIFO Working Papers 668, WIFO.
    5. Lu, Kelin, 2024. "Silver Spoons and Scales of Justice: The Fairness Preference over Unequal Intergenerational Wealth Transfers," MPRA Paper 121232, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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