In a context of depressed wages, temporary work and economic stagnation, what are thousands and thousands of young people around the world clinging to to sustain the standard of living their parents once enjoyed? To inheritance. Intergenerational transfers occupy the public debate step by step, either in the form of taxes that come or go (inheritance) or in the form of investments in life and family support that facilitate access to certain work and social areas.
Heredity influences your life. But how much?
Country to country. There is an entire academic trend specifically interested in the impact that inheritances and intergenerational donations have on the inequality of countries. Do they aggravate or soften it? Several studies point to the second: inheritances represent a higher% of the wealth of poor families, allowing their beneficiaries to offset part of their meager income from capital or work. If they did not exist, inequality would be higher.
Counterfactual. Others suggest otherwise. The truth is that only a small percentage of families inherit amounts or assets large enough to have an impact on their long-term economic future. And this reduced percentage is usually taken up by upper-class households, those that already start with a socio-economic advantage before the intra-family transfer. Thus the things, the inheritances would only aggravate the inequalities of a country.
But how much?
New study. This is what this study published in the Oxford Economics Papers sets out to find out. Its methodology is complex but it starts from a simple postulate: if we start from a hypothetical and equitable distribution of wealth among all households in a country, in what way would inheritances and donations in life distort such equity? To find out, they go to various census and economic databases in four developed countries (Spain, France, the United States, the United Kingdom) and try to isolate the impact of inheritance on the future of each household, controlling for other factors such as age or age. the gender.
Results. Quite significant in terms of wealth distribution. The authors attribute to inheritances or intergenerational donations around 35% in France, around 33% in Spain and around 31% in the United States. In the UK alone, inheritances explain less than a third of national inequality (around 26%). The impact of the family context (how rich your family is) would also explain 9% in France, 10% in the United Kingdom, 13.9% in Spain and 16.9% in the United States. Where we are born and what we receive with it would thus be decisive.
It was something that to a certain extent we could intuit. Other recent research had reached similar conclusions. In this, centered on the United States, the disappearance of inheritances reduced to 57% the total volume of national wealth of the 10% of the richest families (compared to the previous 73%).
The debate. How much we inherit and how we inherit it is a hot topic. We saw it recently on account of Spain: 95% of the wealth of the middle class is “inheritance”, very especially real estate. When speaking of an “inheritance tax” many Spaniards think of their own inheritance, the main vector of wealth in the country (although the overwhelming majority are exempt). It is a good thing but also a negative thing. As the OECD recalls, Spain is the second country in the organization with the largest inheritances and a drag on social mobility. They favor a status quo aside from merit.
The future. The question of succession is an old one. So much so that the richest families in Florence today remain the same as 500 years ago. Or so much so that Adam Smith, father of modern liberalism, already considered them a problem in meritocratic terms: “The Earth and all the riches on it belong to each generation, and the previous one should not have the right to obstruct them from posterity” . In practice, the debate is heading towards a lower weight of inheritance tax and a greater weight of inheritance in the distribution of wealth in each country (in Spain, remember, housing is still the default investment).