Inherited Wealth and Demographic Aging
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...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/06/26543427/inherited-wealth-demographic-aging http://hdl.handle.net/10986/24656 |
| Summary: | 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-à-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. |
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