Co-funded with the W.K. Kellogg Foundation
The rise in economic inequality over the past five decades is typically discussed in terms of income or earnings. Piketty and Saez, for example, report that approximately 50% of national income goes to the top 10% of households, and 23% of income to the top 1%. In comparison, wealth is even more unequally distributed than income. According to Edward Wolff, the top 20% of the wealth distribution held nearly 90% of all wealth with the top 1% holding 35%.
Wealth appears to be an especially important measure of the concentration of social inequality and disadvantage. For example, wealth may affect the transmission of advantage across generations. Unlike education and income, wealth can be directly passed down to subsequent generations through bequests or inter vivos transfers, such as assistance for the down payment on a first home. However, wealth tends to be understudied because of data limitations.
Fabian Pfeffer of the University of Michigan and Alexandra Killewald of Harvard University will assess the strength and pattern of multigenerational wealth associations, and explore the role of intergenerational transfers, home ownership and marriage in wealth mobility across generations. They have three major aims. The first is to analyze intergenerational and multigenerational correlations in wealth and examine the transmission of wealth across three generations. A second aim is to assess the concentration of wealth within families through sibling correlations and through cousin correlations. Third, Pfeffer and Killewald will evaluate how two specific mechanisms, home ownership and marriage patterns, contribute to wealth accumulation and the intergenerational transmission of wealth inequality.