Academic journal article Monthly Labor Review

Is the Inheritance Boom Changing the Distribution of Wealth in the United States?

Academic journal article Monthly Labor Review

Is the Inheritance Boom Changing the Distribution of Wealth in the United States?

Article excerpt

Inheritances and gifts play a major role in the distribution of wealth, accounting for an estimated one-quarter of total household wealth accumulation in the United States. Such wealth transfers are also an important source of both business and home ownership. The conventional wisdom is that inheritances contribute to the overall inequality of household wealth. Moreover, it is commonly believed that inheritances impede intergenerational wealth mobility and play an important role in accounting for the intergenerational transmission of economic and social privilege.

In "Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?" (The Journal of Economic Inequality, November 2013), Edward N. Wolff of New York University and Maury Gittleman of the Bureau of Labor Statistics investigate two main questions: First, have inheritances and other wealth transfers become more important over time? Second, how much, if at all, do inheritances and other wealth transfers contribute to overall wealth inequality? Their research makes use of data for 1989 to 2007 from the Federal Reserve Board's Survey of Consumer Finances (SCF).

With regard to the first question, there is some reason to think that wealth transfers as a share of net worth have been rising over time because the current generation of elderly is now the richest in history. …

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