Inheritance and Wealth Inequality

The distributional effect of inherited wealth has been a long-standing question in economics. This talk presents new evidence on the issue using population-wide register data from Sweden. The findings show that inheritances decrease wealth inequality but increase the absolute dispersion of wealth. The equalizing effect of inheritances is diluted, however, by the fact that less wealthy heirs consume most of their inherited wealth, whereas wealthier heirs tend to save theirs.