Inheritances and inequality within generations

This research seeks to advance our understanding of the effects of the increasing impact of inheritance on current and future inequality, within and between generations.

There is growing evidence that inherited wealth will be far more important for younger generations than for older ones – both in absolute terms and relative to their other economic resources.Within each generation, the receipt of inheritances is very unequally distributed, and the largest inheritances tend to go to those who are already well off.

Using the English Longitudinal Study of Ageing and the Wealth and Assets Survey, rich sources of data on households’ wealth, incomes, and expectations of giving and receiving inheritances, combined  these with cutting-edge models of household decision-making, the research team will examine:

  • how inheritance receipts across and within younger generations are likely to be distributed across income and wealth groups, across those with different education levels, and across the country;
  • how this is likely to be affecting, and to affect in future, choices about how much to work, spend and save;
  • the resulting effects on inequality in wealth and consumption (a proxy for material living standards) over the lifecycle for these generations;
  • and, how this differs from the patterns seen for older generations.

Model simulations will test a range of alternative scenarios to quantify uncertainty around the estimated effect and will be used to model potential changes in government policy or the economic environment and their likely impact  on future wealth inequality.   

Project details

 

Researchers:

Robert Joyce, Institute for Fiscal Studies

Andrew Hood, Institute for Fiscal Studies

Grant amount and duration:

£195,545

July 2018 - December 2020