Adermon, Adrian Lindahl, Mikael Waldenström, Daniel
Year of Publication:
Working Paper No. 2018:8
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.