Publication: Inherited Wealth and Demographic Aging
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Published
2016-06
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Date
2016-07-11
Author(s)
Pestieau, Pierre
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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-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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“Pestieau, Pierre; Onder, Harun. 2016. Inherited Wealth and Demographic Aging. Policy Research Working Paper;No. 7739. © World Bank. http://hdl.handle.net/10986/24656 License: CC BY 3.0 IGO.”
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