Male Inheritance Expectations in the United States in 1870

Abstract

JN working with various data sets for the United States in the 19th century, it has come to my attention that pronounced patterns emerge which depict the relationship between increases in wealth of individuals as they become older. When we abstract from long-run growth, by examining age-specific wealth averages in a given year such as 1850, 1860, or 1870 or even a century later, this wealth-age gradient appears to rise about 4% a year. The increase is usually attributed to savings and capital gains of individuals rather than to transfers from inheritance. If such is the case, the reason for taxing wealth is less compelling since wealth is, in part, a reward for current effort and can not easily be identified as the cumulative effort of past generations. John Brittain has recently publicized and criticized this particular way of measuring and factoring the influence of individual endowment, that is, the effort of activity of the present generation as contrasted to that which is the product of past generations. He has suggested that specialized studies be made of inheritance in an endeavor to better determine whether the wealth of one's parents might explain, in some statistical sense, 1/10, or 1/3, or even 2/3 of the wealth of the present generation. ' It is the purpose of this paper to study some of the relationships between wealth, number of children, and age of fathers, as related to the inheritances and ages of sons, by using data from the 1870 U.S. census of wealth. Statistics will be presented which describe the possible amounts of wealth that are passed on from generation to generation in any given year during the life cycle of the son. I shall argue that a 4% wealth-age gradient can appear within one generation which duplicates any original wealth-age configuration; incentive implications of any current patterns are less cogent in this sense even though only 1/3 of all current aggregate wealth may be considered a transfer from the past. The patterns to be described are of significance not only for the general cultural historian, but also for anyone trying to understand an economic model of inheritance since the extent of parental domination, the influence of family size, and, more generally, the degree of wealth inequality imposed from one generation to the next all contribute some sense of the quantitative impact of inheritance factors even if the model is very elementary.