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

59 Pages Posted: 30 Aug 2016

See all articles by Adrian Adermon

Adrian Adermon

Uppsala University

Mikael Lindahl

University of Gothenburg - Department of Economics and Statistics

Daniel Waldenström

Research Institute of Industrial Economics (IFN)

Multiple version iconThere are 3 versions of this paper

Date Written: August 2016

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: Income mobility, inequality, Inheritance

JEL Classification: D31, J62

Suggested Citation

Adermon, Adrian and Lindahl, Mikael and Waldenström, Daniel, Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations (August 2016). CEPR Discussion Paper No. DP11456, Available at SSRN: https://ssrn.com/abstract=2831960

Adrian Adermon (Contact Author)

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

Mikael Lindahl

University of Gothenburg - Department of Economics and Statistics ( email )

Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden

Daniel Waldenström

Research Institute of Industrial Economics (IFN) ( email )

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

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