The deserving or undeserving rich? New survey evidence on multimillionaire households in Europe

Abstract

This article addresses two questions. First, when do people consider the rich to be deserving? A literature survey reveals that it is first and foremost the origin of great wealth that determine public attitudes towards the rich. Rich people “deserve” to be rich if their wealth is perceived as having resulted from competence and hard work rather than from inheritance. Second, who are the rich? Drawing on data from the second wave of the European Household Finance and Consumption Survey (HFCS), it is found that multimillionaire households benefit disproportionately from wealth transfers. Large gifts and bequests alone, however, are not good predictors of rich household status. It is rather the highly educated top heir running a (family) business that best represents the rich in Europe. Such entrepreneurs who benefit from earned and unearned financial resources neither fully correspond to nor contradict the existing public beliefs in the “deservingness” of the rich. It is argued that, while still underresearched, it is the “hybrid rich” that dominate in the twenty-first-century capitalism that is marked by historically high levels of wealth inequality alongside inefficiencies in tax systems.