Discussion paper

DP11387 Inherited Wealth and Demographic Aging

The role of inherited wealth in modern economies has increasingly become under scrutiny.
This study presents one of the first attempts to shed light on how demographic aging could
shape this role. We show 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
oset and potentially reverse these eects. We also show that aging could increase the size
of individual bequests vis-à-vis real wages. However, these bequests will be more unequally
distributed if aging is driven by a drop in fertility. In comparison, the eect of increasing
longevity on their distribution in non-monotonic.


Pestieau, P and H Onder (2016), ‘DP11387 Inherited Wealth and Demographic Aging‘, CEPR Discussion Paper No. 11387. CEPR Press, Paris & London. https://cepr.org/publications/dp11387