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Journal Articles Quarterly Journal of Economics Year : 2011

On the Long-Run Evolution of Inheritance: France 1820-2050

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Abstract

This article attempts to document and account for the long-run evolution of inheritance. We find that in a country like France the annual flow of inheritance was about 20-25% of national income between 1820 and 1910, down to less than 5% in 1950, and back up to about 15% by 2010. A simple theoretical model of wealth accumulation, growth, and inheritance can fully account for the observed U-shaped pattern and levels. Using this model, we find that under plausible assumptions the annual bequest flow might reach about 20-25% of national income by 2050. This corresponds to a capitalized bequest share in total wealth accumulation well above 100%. Our findings illustrate the fact that when the growth rate g is small, and when the rate of return to private wealth r is permanently and substantially larger than the growth rate (say, r = 4-5% versus g = 1-2%), which was the case in the nineteenth century and early twentieth century and is likely to happen again in the twenty-first century, then past wealth and inheritance are bound to play a key role for aggregate wealth accumulation and the structure of lifetime inequality. Contrary to a widespread view, modern economic growth did not kill inheritance.

Dates and versions

halshs-00754528 , version 1 (20-11-2012)

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Thomas Piketty. On the Long-Run Evolution of Inheritance: France 1820-2050. Quarterly Journal of Economics, 2011, 126 (3), pp.1071-1131. ⟨10.1093/qje/qjr020⟩. ⟨halshs-00754528⟩
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