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The long and the short of it: Inheritance and wealth in Ireland

Author

Listed:
  • Arrigoni, Simone

    (Central Bank of Ireland)

  • Boyd, Laura

    (Central Bank of Ireland)

  • McIndoe-Calder, Tara

    (Central Bank of Ireland)

Abstract

Inheritances matter for wealth accumulation, and are often central to policy debates on wealth taxes. This letter shows that up to 2020 over one-third of households in Ireland had received inherited wealth, the cumulated value of which (€97 billion) accounts for approximately one sixth of current net wealth for these households. But the impact is potentially wider than the direct value of the inheritance itself: inheritors are typically much wealthier and own more property. Nevertheless, inherited wealth represents a larger share of total net wealth for households in the middle of the wealth distribution than for the wealthiest households. As a result, our analysis shows that inheritances in Ireland contribute little to wealth inequality, and may even have reduced it over time, similar to findings for Britain and the United States.

Suggested Citation

  • Arrigoni, Simone & Boyd, Laura & McIndoe-Calder, Tara, 2023. "The long and the short of it: Inheritance and wealth in Ireland," Economic Letters 1/EL/23, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:1/el/23
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    File URL: https://www.centralbank.ie/docs/default-source/publications/economic-letters/the-long-and-short-of-inheritance-and-wealth-in-ireland.pdf?sfvrsn=e185981d_9
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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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