CRIS Scientific Seminar 2023-2024

Friday, November 17th 2023, 11:30 am
Sciences Po, Room Salle du Conseil (13, Université)

The Principle of Dynastic Succession in Wealth Transmission

Nhat An Trinh
Research Officer
Institute for New Economic Thinking
Department of Social Policy and Intervention
Nuffield College, University of Oxford

Mounting research documents that wealth strongly persists across generations. Inheritances and inter-vivo gifts from parents to children are key contributors to this persistence. Intergenerational transfers are yet not only made unequally between families. It has been shown that a substantial share of intergenerational transfers is also made unequally within families.

In this study, we address this puzzle of unequal division and empirically investigate the distribution of intergenerational transfers through the lens of what we call the ‘principle of dynastic succession’.
This principle states that intergenerational transfers are made such that the family and its wealth are carried on into the long-lasting future, leading to unequal division.
Analyzing administrative data from the German inheritance and gift tax register (2007-2020), we argue that the principle is particularly salient in the presence of structuring assets (e.g. family business) and that its application varies along the estate distribution.
Going beyond individual parent-child transactional relationships, the principle of dynastic succession allows to link intra-familial disparities to long-term persistence in overall wealth inequality more broadly. Thereby, it sheds light on a so far neglected mechanism through which the family generates inequalities both within and between generations.

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