Inherited Wealth and Demographic Aging

20 Pages Posted: 19 Jul 2016

See all articles by Harun Onder

Harun Onder

World Bank

Pierre Pestieau

University of Liège - Research Center on Public and Population Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Multiple version iconThere are 3 versions of this paper

Date Written: June 30, 2016

Abstract

The role of inherited wealth in modern economies has increasingly come under scrutiny. This study presents one of the first attempts to shed light on how demographic aging could shape this role. It shows that, in the absence of retirement annuities, or for a given level of annuitization, both increasing longevity and decreasing fertility should reduce the inherited share of total wealth in a given economy. Thus, aging is not likely to explain a recent surge in this share in some advanced economies. Shrinking retirement annuities, however, could offset and potentially reverse these effects. The paper also shows that aging could increase the size of individual bequests vis-?-vis real wages. However, these bequests will be more unequally distributed if aging is driven by a drop in fertility. In comparison, the effect of increasing longevity on their distribution in non-monotonic.

Keywords: Pro-Poor Growth, Equity and Development, Achieving Shared Growth

Suggested Citation

Onder, Harun and Pestieau, Pierre, Inherited Wealth and Demographic Aging (June 30, 2016). World Bank Policy Research Working Paper No. 7739, Available at SSRN: https://ssrn.com/abstract=2811387

Harun Onder (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Pierre Pestieau

University of Liège - Research Center on Public and Population Economics ( email )

Boulevard du Rectorat, 7, Batiment 31
Sart-Tilman
B-4000 Liege, 4000
Belgium
+32 4 366 3108 (Phone)
+32 4 366 3106 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Vopie Roman Pays
Louvain la Neuve
Belgium

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
47
Abstract Views
400
PlumX Metrics