Wealth and inheritance in Britain from 1896 to the present

Atkinson, Anthony B. (2018) Wealth and inheritance in Britain from 1896 to the present. Journal of Economic Inequality, 16 (2). 137 - 169. ISSN 1569-1721

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Abstract

Personal wealth has grown since the 1970s twice as fast in real terms as national income. Has this rise in the wealth-income ratio led to a corresponding increase in the wealth being passed on from one generation to the next? Are we returning to the levels of inheritance found in the 19th century? The aim of this paper is to construct UK evidence on the extent of the transmission of wealth in the form of estates and gifts inter vivos. It takes a long-run view of inheritance, starting from 1896, when the modern Estate Duty was introduced, and exploits the extensive estate data published over the years. Construction of a long-run time series for more than a century is challenging, and there are important limitations. The resulting time-series demonstrates the major importance of inheritance in the UK before the First World War, when the total transmitted wealth represented some 20 per cent of net national income. In the inter-war period, the total was around 15 per cent, falling to some 10 per cent after the Second World War, and then falling further to below 5 per cent in the late 1970s. Since then, there has indeed been an upturn: a rise from 4.8 per cent in 1977 to 8.2 per cent in 2006. This increase was more or less in line with the increase in personal wealth, and has to be interpreted in the light of the changing net worth of the corporate and public sectors of the economy.

Item Type:	Article
Official URL:	https://link.springer.com/journal/10888
Additional Information:	© 2018 The Author
Divisions:	Statistics
Subjects:	H Social Sciences > HC Economic History and Conditions
Date Deposited:	23 Jul 2018 15:55
Last Modified:	29 Mar 2024 02:27
Projects:	ES/I033114/1, INO14-00023
Funders:	Economic & Social Research Council, Department for International Development, Institute for New Economic Thinking
URI:	http://eprints.lse.ac.uk/id/eprint/89396

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