Intergenerational Transmission Of Wealth Research Articles

Inheriting a dynasty: Family succession dramas and the moral economy of Downton Abbey

The role of inherited or family wealth in reproducing and even exacerbating wealth inequalities has been addressed in various studies in recent years. Bringing together representation studies with studies on cultural and moral economies, this article analyses how cultural norms indispensable to the preservation of dynastic wealth are negotiated through contemporary popular culture and television series. It introduces the concept of family succession drama, referring to television fiction that focuses on issues concerning intergenerational transmission of wealth and/or privileges and analyses the series Downton Abbey as a case study for interrogating the ambiguous affirmation of inherited wealth and dynastic privileges in a historical melodrama. By focusing on Downton Abbey, the article considers how hereditary rights and dynastic privileges are negotiated in a heritage drama in ways that also enable the legitimation of contemporary dynasty-making. While acknowledging the anxieties caused by class differences, Downton Abbey nevertheless affirms the necessity for various hereditary privileges and fortunes, thereby excluding any true alternatives for (contemporary) dynastic dynamics.

Wealth, health and inequality in Agta foragers.

There is significant evidence from large-scale, industrial and post-industrial societies that greater income and wealth inequality is negatively associated with both population health and increasing health inequalities. However, whether such relationships are inevitable and should be expected to impact the health of small-scale societies as they become more market-integrated is less clear. Here, using mixed-effect models, we explore the relationship between health, wealth, wealth inequality and health inequalities in a small-scale foraging population from the Philippines, the Agta. Across 11 camps, we find small to moderate degrees of wealth inequality (maximal Gini Coefficient 0.44) which is highest in the most permanent camps, where individuals engage more heavily in the formal market. However, in both adults (n = 161) and children (n = 215), we find little evidence that either wealth or wealth inequality associates with ill health, except for one measure of nutritional condition-red blood cell count. We interpret these results in the light of high levels of cooperation among the Agta which may buffer against the detrimental effects of wealth inequality documented in industrial and post-industrial societies. We observe little intergenerational wealth transmission, highlighting the fluid nature of wealth, and thus wealth inequality, particularly in mobile communities. The deterioration of nutritional status, as indicated by red blood cell counts, requires further investigation before concluding the Agta's extensive cooperation networks may be beginning to breakdown in the face of increasing inequality.

The Intergenerational Transmission of Housing Wealth

The Intergenerational Transmission of Housing Wealth

The Intergenerational Transmission of Housing Wealth

The Intergenerational Transmission of Housing Wealth

Understanding and calculating household size, wealth, and inequality in the Maya Lowlands

AbstractInequality is present in all human societies, but building a robust understanding of how that inequality developed and persisted for centuries requires historical and archaeological data. Identifying the degree of inequality (or disparity) in ancient communities can be addressed through a variety of methods. One method becoming standard practice in archaeology evaluates inequality through quantitative analysis of robust settlement data. In this Compact Special Section, we assess household size as a potential reflection of wealth inequality among Classic period (a.d. 250–900) Maya settlements. First, we generate house-size data from both pedestrian and remotely sensed LiDAR surveys. Then we use those data to calculate Gini coefficients and Lorenz curves, which provide measures of variation. Gini coefficients range from 0 to 1, where 0 reflects perfect equality and 1 indicates perfect inequality, regardless of the actual values in the distribution. Both area (m2) and volume (m3) provide different, complementary metrics to investigate residential size as a metric for wealth inequality among Classic Maya Lowland settlements. Proposed mechanisms that generate inequality include the intergenerational transmission of wealth and differential access to resources; however, addressing these and other pathways for how inequality develops and persists, and how it was maintained in the past provides insight into similar processes of systemic inequality worldwide.

Intergenerational wealth transmission in Great Britain

AbstractWe document the intergenerational wealth transmission between adult offspring and their parent's using the Wealth and Assets Survey for Great Britain. We estimate an intergenerational wealth elasticity of 0.4 and Rank‐Rank elasticity of 0.3 and find intergenerational wealth transmission for individuals in their 60s is lower than for those currently aged in their 30s and early 40s, though rank based estimates are stable. Our estimation results imply that the intergenerational wealth elasticity is 3.8 percentage points higher when comparing people with those the same age 6 years previously suggesting strong evidence of higher intergenerational wealth persistence in younger age cohorts. Taken together, the findings have important implications for future wealth inequalities and must be addressed.

Intergenerational wealth transmission and homeownership in Europe-a comparative perspective.

The literature on social and wealth inequality has long acknowledged the importance of intergenerational wealth transmission (IWT) to inequality in homeownership tenure. However, it has paid insufficient attention to the institutional structures that moderate these inequalities. Therefore, in this study, we ask how institutional factors via differential housing finance systems and governmental housing policies, moderate the association between IWT and homeownership tenure. This is done by using the framework of housing regime configurations and mortgage market financialization. To do so, we pooled data for 20 European countries from the European Central Bank’s Household Finance and Consumption Survey (HFCS) for 2010–2017, for household heads aged 25–40. Our main findings show consistent contradiction to the welfare state–homeownership “trade-off” hypothesis: that is, when the rental market is more heavily regulated, it is actually young adults who benefited from IWT or who received higher value of IWT have a higher probability of mortgaged homeownership. Paradoxically, when housing finance institutions are more active and generous, the wealthiest young adults hold an advantage in mortgaged homeownership. Therefore, liberal mortgage markets actually serve to enable wealthier young adults to reproduce and preserve their parental wealth status. Further, when housing prices are less affordable (median mortgage-to-income ratio), those who have received a higher amount of IWT hold an advantage in mortgaged homeownership. We discuss the implications of our findings, which cut across the socioeconomic, spatial, and demographical arenas.

My Debt? Our Debt? Ambiguity and Advantage in Family Financial Assistance for Graduate School1

Support for higher education is a known and well‐documented venue for financial transfers within families, but practices of family support beyond college are less understood. Drawing on interviews with recent master's degree recipients who have student debt, I find key class differences in the process and forms of family financial assistance for graduate and professional education. Working‐class young adults receive clear, mainly in‐kind “business as usual” support that, while limited, is consistent with both expectations and prior support with undergraduate education. In contrast, despite proclamations of financial independence after college, young adults from middle‐class backgrounds engage in an emotional “dance” of family assistance. They field ambiguous offers of support which often evolve into substantial financial transfers and receive that financial support with ambivalence, which minimizes the existence of support and their own agency in receiving it. This article illustrates how, even with anxiety and uncertainty in place of strategic institutional navigation, middle‐class families transmit economic advantages that facilitate social reproduction. Rather than being a discrete, automatic transfer, intergenerational wealth transmission is contextual and comprised of everyday, relational processes.

Intergenerational wealth transfers in Great Britain from the Wealth and Assets Survey in comparative perspective

AbstractWealth surveys that collect information on intergenerational transfers provide new scope for comparative study of those transfers and their relationship with wealth across rich countries. However, this is problematic in the case of Great Britain, due to specific features of the Wealth and Assets Survey (WAS), the central source of survey‐based household wealth data, in particular the extent of missing information in its first wave. This has severely constrained efforts to investigate patterns of wealth transfer in Great Britain in comparative perspective. In this paper, we set out these issues and present ways of dealing with them. On this basis, we then examine the main similarities and differences in patterns of intergenerational transmission of wealth between Great Britain, France, Germany, Italy, Spain and the United States. Our findings reveal common features across these countries as well as some important respects in which Great Britain was distinctive, though less of an outlier than the US. About 35 per cent of British households reported receiving an intergenerational wealth transfer at some point, similar to most of the comparator countries but much higher than the US. We conclude by setting out how WAS can be enhanced to address these issues at source, proposals with which the Office for National Statistics is seriously engaged.

The Contribution of Shareholder Primacy to the Racial Wealth Gap

The US racial wealth gap is substantial and growing, stemming from a history of structural racism and the intergenerational transmission of wealth. This article investigates the role of corporate equity and mutual fund ownership on the racial wealth gap over time. 92.1 percent of US corporate equity and mutual fund value is owned by white households; Black households own 1.5 percent while Hispanic households own 1.9 percent. I use the Federal Reserve's Distributional Financial Accounts to determine the changing impact of the corporate equity gap on the racial wealth gap, and to measure how shareholder payments—dividends and stock buybacks—are divided by race and ethnicity. I find that total shareholder payments made to white households during that time frame totaled $13 trillion, while $181 billion went to Black households and $212 billion to Hispanic households. I then find that the proportion of the gap in corporate equity and mutual fund ownership to the overall racial wealth gap has grown over the past three decades, from 10 percent to 23 percent. This analysis contributes to policy discussions about ending shareholder primacy and wealth inequities that are a legacy of the US's history of slavery, racism, and xenophobia.

Special Report: Stress and Distress During Pregnancy—How to Protect Both Mother and Child

Special Report: Stress and Distress During Pregnancy—How to Protect Both Mother and Child

The Intergenerational Transmission of Housing Wealth

The Intergenerational Transmission of Housing Wealth

Inheritance, gifts and the accumulation of wealth for low-income households

Many low-income households in rich countries have very little wealth, but the role of intergenerational wealth transmission in underpinning this deficit is not known. This article seeks to fill that gap by investigating patterns of past wealth transfer receipt for low-income versus other households in seven rich countries and assessing the contribution that these transfers, or their absence, make to current wealth levels. We find that households on low incomes are relatively disadvantaged in terms of intergenerational transfers received in the past, both in terms of the likelihood of having received any and the amounts received by those who do benefit from such transfers. The role that this disadvantage plays in the linkage between current low-income and low wealth is assessed and evidence presented that it is significant. Simulation of a universal wealth transfer scheme or ‘capital endowment’ on reaching adulthood for two countries shows that such a policy could lead to a marked decline in the proportion of low-income adults with negative or no wealth. This and alternative or complementary policy responses to these wealth deficits merit the most serious attention.

Brick-by-brick inequality. Homeownership in Italy, employment instability and wealth transmission.

This paper investigates changes between, and inequalities within, birth-cohorts in Italy, surrounding homeownership. Italy is a homeownership and familialistic society, where in recent decades an increasing 'generational divide' in employment prospects has opened up, as a side-effect of a partial and targeted labour market deregulation. Drawing on the interplay of macro-level constraints with micro-level factors, we discuss patterns of inequality in attaining homeownership between cohorts, arising from greater instability of employment for young adults, and within cohorts, stemming from class-based patterns of intergenerational wealth transmission. Our analytical strategy combines a sequential cohort design with two levels of analysis that simultaneously consider young people around the normative age of housing independence and wealth transmission from their families triggered by their leaving the nest. Longitudinal analyses apply random-effects probit models and linear probability distributed fixed-effects to panel data from the Bank of Italy (SHIW 1989-2016). Results show a decrease in homeownership attainment across cohorts, which can be partially ascribed to employment disadvantages faced by younger cohorts. On top of this, class-specific patterns of intergenerational transmission are in place: lower classes rely on timely housing wealth transfers, whereas upper classes are prepared to provide their children with an extended stream of financial transfers.

The Inherited Inequality: How Demographic Aging and Pension Reforms can Change the Intergenerational Transmission of Wealth

AbstractThe role of inherited wealth in modern economies has increasingly come under scrutiny. This study presents one of the first attempts to shed light on how demographic aging could shape this role. It shows that, in the absence of retirement annuities, or for a given level of annuitization, both increasing longevity and decreasing fertility should reduce the inherited share of total wealth in a given economy. Thus, aging is not likely to explain a recent surge in this share in some advanced economies. Shrinking retirement annuities, however, could offset and potentially reverse these effects. The paper also shows that individual bequests will be more unequally distributed if aging is driven by a drop in fertility. In comparison, the effect of increasing longevity on their distribution is non-monotonic.

Differences between sons and daughters in the intergenerational transmission of wealth.

Persistent interest lies in gender inequality, especially with regard to the favouring of sons over daughters. Economists are concerned with how privilege is transmitted across generations, and anthropologists have long studied sex-biased inheritance norms. There has, however, been no focused cross-cultural investigation of how parent-offspring correlations in wealth vary by offspring sex. We estimate these correlations for 38 wealth measures, including somatic and relational wealth, from 15 populations ranging from hunter-gatherers to small-scale farmers. Although small sample sizes limit our statistical power, we find no evidence of ubiquitous male bias, at least as inferred from comparing parent-son and parent-daughter correlations. Rather we find wide variation in signatures of sex bias, with evidence of both son and daughter-biased transmission. Further, we introduce a model that helps pinpoint the conditions under which simple mid-point parent-offspring wealth correlations can reveal information about sex-biased parental investment. Our findings are relevant to the study of female-biased kinship by revealing just how little normative descriptors of kinship systems, such as patrilineal inheritance, capture intergenerational correlations in wealth, and how variable parent-son and parent-daughter correlations can be. This article is part of the theme issue 'The evolution of female-biased kinship in humans and other mammals'.

The Intergenerational Impact of China's New Rural Pension Scheme

The Intergenerational Impact of China's New Rural Pension Scheme

Social Welfare, Parental Altruism and Inequality

I discuss two alternative notions of social welfare (utilitarian and self- enforcing) in a dynastic model with heterogeneous and persistent degrees of parental altruism and evaluate the implied levels of consumption inequality. Then, I study a decentralization of planning optima in a competitive equilibrium where the only source of inequality arises from intergenerational wealth transmission and I show that the self-enforcing criterion implies a negative tax rate on the less altruistic individuals’ capital income.

Born with a Silver Spoon? Danish Evidence on Wealth Inequality in Childhood

We study wealth inequality in childhood using Danish wealth records from three decades. While teenagers have some earnings, we estimate that transfers account for at least 50 percent of wealth at age 18, and much more so for the rich children. Inheritance from grandparents does not appear quantitatively important, but we do find evidence that children receive inter vivos transfers. While wealth holdings are small in childhood, they have strong predictive power for future wealth in adulthood. Asset holdings at age 18 are more informative than parental wealth in predicting wealth of children many years later when they are in their 40s. Hence, childhood wealth reveals significant heterogeneity in the intergenerational transmission of wealth, which is not simply captured by parental wealth alone. We investigate why this is the case and rule out that childhood wealth in itself can accumulate enough to explain later wealth inequality. Our evidence indicates that childhood wealth is a proxy for a broad set of circumstances related to intergenerational transmission and future wealth accumulation, including savings/investment behavior and additional transfers.

How Does Intergenerational Wealth Transmission Affect Wealth Concentration?

In this note, we seek to establish the role of intergenerational wealth transmission by using the Federal Reserve Board's Survey of Consumer Finances (SCF), which contains extensive information about household balance sheets, intergenerational transfers made and received, and demographic and socioeconomic characteristics of respondents.