Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 670: Intergenerational wealth mobility and the role of inheritance: Evidence from multiple generations
Adrian Adermon, Mikael Lindahl () and Daniel Waldenström
Additional contact information
Adrian Adermon: IFAU; Department of Economics, Uppsala University
Mikael Lindahl: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Sweden
Daniel Waldenström: Paris School of Economics and Research Institute of Industrial Economics (IFN), CEPR, IZA, UCLS and UCFS
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
57 pages, August 2016
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