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Recent trends in the size and the distribution of inherited wealth in the UK

Karagiannaki, Eleni (2011) Recent trends in the size and the distribution of inherited wealth in the UK. CASEpapers, CASE/146. Centre for Analysis of Social Exclusion, London School of Economics and Political Science, London, UK.

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Abstract

In this paper we document the evolution of the annual flow of inheritances in the UK during the period 1984-2005 and provide estimates for the overall magnitude and the distribution of inherited wealth. Our results indicate that the period under examination the annual flow of inheritance increased markedly, from £22 billion in 1984 to £56 billion in 2005. The main drivers behind this increase were the rise in house prices and to a lesser extent the increase in the proportion of inheritances which included housing assets. Our results, based on analysis of survey data, show that the distribution of inheritances is characterized by a very high degree of inequality (comparable by and large to that observed in personal wealth) and that this has increased over time. However, the inequality increasing effect from the greater inequality in the distribution of inheritance was counterbalanced by the increase in the percentage of the population who received an inheritance. Our results also show that inheritance is positively associated with socio-economic status and that the disparities between groups became slightly more pronounced over time (mainly across educational groups). However, our evidence also shows that inheritance for the majority of recipients is fairly small and that large inheritances are limited to a very small minority of the population.

Item Type: Monograph (Discussion Paper)
Official URL: http://sticerd.lse.ac.uk/case/
Additional Information: © 2011 The Authors
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
Journal of Economic Literature Classification System: D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General
D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
Sets: Collections > Economists Online
Research centres and groups > LSE Global Governance
Research centres and groups > Centre for Analysis of Social Exclusion (CASE)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: CASE/146
Date Deposited: 22 May 2012 16:54
URL: http://eprints.lse.ac.uk/43868/

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