Discussion paper

DP11456 Intergenerational wealth mobility and the role of inheritance: Evidence from multiple generations

This study estimates intergenerational correlations in mid-life wealth across three generations, and a young fourth generation, and examines how much of the parent-child association that can be explained by inheritances. Using a Swedish data set we find parent-child rank correlations of 0.3–0.4 and grandparents-grandchild rank correlations of 0.1–0.2. Conditional on parents’ wealth, grandparents’ wealth
is weakly positively associated with grandchild’s wealth and the parent-child correlation is basically unchanged if we control for grandparents’ wealth. Bequests and gifts strikingly account for at least 50 per cent of the parent-child wealth correlation while earnings and education are only able to explain 25 per cent.

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Citation

Waldenström, D, A Adermon and M Lindahl (2016), ‘DP11456 Intergenerational wealth mobility and the role of inheritance: Evidence from multiple generations‘, CEPR Discussion Paper No. 11456. CEPR Press, Paris & London. https://cepr.org/publications/dp11456