Open AccessWealth inequality, intergenerational transfers, and family background
Author(s) -
Juan Carlos Palomino,
Gustavo A. Marrero,
Brian Nolan,
Juan Prieto Rodríguez
Publication year - 2021
Publication title -
oxford economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.68
H-Index - 69
eISSN - 1464-3812
pISSN - 0030-7653
DOI - 10.1093/oep/gpab052
Subject(s) - inequality , counterfactual thinking , economics , demographic economics , distribution (mathematics) , mathematical analysis , philosophy , mathematics , epistemology
We estimate the contribution of intergenerational transfers (inheritances and gifts) and family background to wealth inequality in four OECD countries: France, Spain, Great Britain, and the USA. We compare the observed wealth distribution with a non-parametric counterfactual distribution where all differences in wealth associated with intergenerational transfers and family background are removed. Despite the diversity of the countries analysed, we find similar patterns. The combined contribution of intergenerational transfers and family background to wealth inequality is sizeable in the four countries, ranging from 36% in Great Britain to 49% in the USA. When interactions between the two factors are accounted for, and the Shapley value decomposition is used to fully disentangle the contribution of each factor based on its marginal contribution, intergenerational transfers account for between 26% in Great Britain and 36% of wealth inequality in France, with family background ranging from 9% in France to 17% in the USA.