The (Un)Importance of Inheritance

48 Pages Posted: 19 May 2022

See all articles by Sandra E. Black

Sandra E. Black

Columbia University; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; Norwegian School of Economics (NHH) - Department of Economics

Paul J. Devereux

University College Dublin - Department of Economics; IZA Institute of Labor Economics

Fanny Landaud

Norwegian School of Economics (NHH) - Department of Economics

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics; IZA Institute of Labor Economics

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Abstract

Transfers from parents-either in the form of gifts or inheritances-have received much attention as a source of inequality. This paper uses administrative data for the population of Norway to examine the share of the Total Inflows (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. 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.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, suggesting that inheritance taxes may do little to mitigate wealth inequality.

Keywords: intergenerational transmission, inheritances and gifts, wealth inequality

JEL Classification: G51, J01, J1

Suggested Citation

Black, Sandra E. and Devereux, Paul J. and Landaud, Fanny and Salvanes, Kjell G., The (Un)Importance of Inheritance. IZA Discussion Paper No. 15034, Available at SSRN: https://ssrn.com/abstract=4114565 or http://dx.doi.org/10.2139/ssrn.4114565

Sandra E. Black (Contact Author)

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Paul J. Devereux

University College Dublin - Department of Economics ( email )

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IZA Institute of Labor Economics

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Fanny Landaud

Norwegian School of Economics (NHH) - Department of Economics ( email )

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Norway

HOME PAGE: http://https://www.nhh.no/en/employees/faculty/fanny-landaud/

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics ( email )

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Norway
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+47 5 595 9543 (Fax)

IZA Institute of Labor Economics

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Germany

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