Abstract
Using data from the Survey of Consumer Finances (SCF), we found that on average over the period from 1989 to 2007, about one fifth of American households at a given point of time reported a wealth transfer and these accounted for quite a sizeable figure, about a quarter of their net worth. Over the lifetime, about 30 percent of households could expect to receive a wealth transfer and these would account for close to 40 % of their net worth near time of death. However, there is little evidence of an inheritance “boom.” In fact, from 1989 to 2007, the share of households reporting a wealth transfer fell by 2.5 percentage points, a time trend statistically significant at the one percent level. The average value of inheritances received among all households did increase but at a slow pace, by 10 %; the time trend is not statistically significant. Wealth transfers as a proportion of current net worth fell sharply over this period, from 29 to 19 %, though the time trend once again is not statistically significant. We also found that inheritances and other wealth transfers tend to be equalizing in terms of the distribution of household wealth, though a number of caveats apply to this result.
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An earlier version of this paper was presented at the BCL/ECB Joint Conference on Household Finance and Consumption, Luxembourg, October 25–26, 2010. We would like to thank our discussant, Helen Connolly, for her very helpful comments. We would also like to gratefully acknowledge the financial support of the Russell Sage Foundation for this project. The views expressed here are those of the authors and do not necessarily reflect the views or policies of the Bureau of Labor Statistics or any other agency of the U.S. Department of Labor.
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Wolff, E.N., Gittleman, M. Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?. J Econ Inequal 12, 439–468 (2014). https://doi.org/10.1007/s10888-013-9261-8
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DOI: https://doi.org/10.1007/s10888-013-9261-8