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.