Inheritance, gifts and the accumulation of wealth for low-income households. (December 2021)

• Record Type: Journal Article
• Authors: Morelli, Salvatore; Nolan, Brian; Palomino, Juan C; Van Kerm, Philippe
• Other Names: Marx Ive guest-editor.; Nolan Brian guest-editor.
• Is Part Of: Journal of European social policy. Volume 31:Number 5(2021)
• Page Start: 533
• Page End: 548
• Publication Date: 2021-12
• Subjects: wealth -- poverty -- inheritance -- capital endowment; Europe -- Social policy -- Periodicals; Social policy -- Periodicals; European Economic Community countries -- Social policy -- Periodicals; 361.6109405
• DOI: 10.1177/09589287211040419
• Languages: English
• ISSNs: 0958-9287

Abstract

Many low-income households in rich countries have very little wealth, but the role of intergenerational wealth transmission in underpinning this deficit is not known. This article seeks to fill that gap by investigating patterns of past wealth transfer receipt for low-income versus other households in seven rich countries and assessing the contribution that these transfers, or their absence, make to current wealth levels. We find that households on low incomes are relatively disadvantaged in terms of intergenerational transfers received in the past, both in terms of the likelihood of having received any and the amounts received by those who do benefit from such transfers. The role that this disadvantage plays in the linkage between current low-income and low wealth is assessed and evidence presented that it is significant. Simulation of a universal wealth transfer scheme or 'capital endowment' on reaching adulthood for two countries shows that such a policy could lead to a marked decline in the proportion of low-income adults with negative or no wealth. This and alternative or complementary policy responses to these wealth deficits merit the most serious attention.