The Role of Bequests in Shaping Wealth Inequality: Evidence from Danish Wealth Records

TY - JOUR

T1 - The Role of Bequests in Shaping Wealth Inequality: Evidence from Danish Wealth Records

AU - Boserup, Simon Halphen

AU - Kopczuk, Wojciech

AU - Kreiner, Claus Thustrup

N1 - JEL Classifikation: D31; D64

PY - 2016/5

Y1 - 2016/5

N2 - Using Danish administrative data, we estimate the impact of bequests on the level and inequality of wealth. We compare the distributions of wealth over time of people whose parent died and those whose parent did not. Bequests account for 26 percent of the average post-bequest wealth 1-3 years after parental death and significantly affect wealth throughout the distribution. Bequests increase absolute wealth inequality (variance of the distribution censored at the top/bottom 1% increases by 33 percent), but reduce relative inequality (the top 1% share declines by 6 percentage points from the base of 31 percent).

AB - Using Danish administrative data, we estimate the impact of bequests on the level and inequality of wealth. We compare the distributions of wealth over time of people whose parent died and those whose parent did not. Bequests account for 26 percent of the average post-bequest wealth 1-3 years after parental death and significantly affect wealth throughout the distribution. Bequests increase absolute wealth inequality (variance of the distribution censored at the top/bottom 1% increases by 33 percent), but reduce relative inequality (the top 1% share declines by 6 percentage points from the base of 31 percent).

KW - Faculty of Social Sciences

KW - D31

KW - D64

U2 - 10.1257/aer.p20161036

DO - 10.1257/aer.p20161036

M3 - Journal article

SN - 0002-8282

VL - 106

SP - 656

EP - 661

JO - The American Economic Review

JF - The American Economic Review

IS - 5

ER -