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The impact of inheritance on the distribution of wealth: evidence from Great Britain

Karagiannaki, Eleni (2017) The impact of inheritance on the distribution of wealth: evidence from Great Britain. Review of Income and Wealth, 63 (2). pp. 394-408. ISSN 0034-6586

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Identification Number: 10.1111/roiw.12217

Abstract

Using the British Household Panel Survey, we investigate the role of inheritance in shaping the distribution of household wealth in Great Britain during 1995-2005 – a period characterised by a substantial increase in wealth and an equally important decrease in wealth inequality. Abstracting from behavioural effects, we find that inheritances received during this period accounted for 30 per cent of the increase in wealth of inheritors. Regression estimates of the effect of inheritance on wealth accumulation suggest that households spend 30 per cent of their inheritances on average, and that there is substantial heterogeneity in household responses. Households that accumulated more wealth saved a larger share of their inheritances, as did middle aged households and those with lower initial wealth. Although inheritances are highly unequal they had a small impact on overall wealth inequality. This mainly reflected the fact that their size relative to other sources of wealth was very small.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 2015 International Association for Research in Income and Wealth
Divisions: STICERD
Centre for Analysis of Social Exclusion
Subjects: H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: 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 > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Research centres and groups > Centre for Analysis of Social Exclusion (CASE)
Date Deposited: 03 Jul 2015 14:28
Last Modified: 30 Jan 2019 20:35
Funders: Nuffield Foundation
URI: http://eprints.lse.ac.uk/id/eprint/62622

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