Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations

58 Pages Posted: 16 Aug 2016

See all articles by Adrian Adermon

Adrian Adermon

Uppsala University

Mikael Lindahl

University of Bonn; IZA Institute of Labor Economics

Daniel Waldenström

Research Institute of Industrial Economics

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Abstract

This study estimates intergenerational correlations in mid-life wealth across three generations, and a young fourth generation, and examines how much of the parent-child association that can be explained by inheritances. Using a Swedish data set we find parent-child rank correlations of 0.3–0.4 and grandparents-grandchild rank correlations of 0.1–0.2. Conditional on parents' wealth, grandparents' wealth is weakly positively associated with grandchild's wealth and the parent-child correlation is basically unchanged if we control for grandparents' wealth. Bequests and gifts strikingly account for at least 50 per cent of the parent-child wealth correlation while earnings and education are only able to explain 25 per cent.

Keywords: multigenerational mobility, bequests, mid-life wealth

JEL Classification: D31, J62

Suggested Citation

Adermon, Adrian and Lindahl, Mikael and Waldenstrom, Daniel, Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations. IZA Discussion Paper No. 10126. Available at SSRN: https://ssrn.com/abstract=2822665

Adrian Adermon (Contact Author)

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

Mikael Lindahl

University of Bonn ( email )

Postfach 2220
Bonn, D-53012
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Daniel Waldenstrom

Research Institute of Industrial Economics ( email )

P.O. Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se/danielw

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