Assortative mating and wealth inequality in Great Britain: evidence from the baby boomer and Gen X cohorts

We study partnership sorting by education, the profile of wealth accumulation and the implications for intra and intergenerational wealth inequality for two cohorts born in 1947-1953 and 1973-1979 using the Wealth and Assets Survey for Great Britain. Our findings show substantial evidence of positive sorting by education relative to random matching. By the time highly educated baby boomer couples reach their mid-late 60s their reported level of net median net wealth of £2.49M is close to seven times that of low educated couples. Regarding future wealth transfers, we find baby boomers' inheritance attitude is strongly influenced by their own lifecycle profile of wealth accumulation and in particular homeownership and level of historical inheritance received. Moreover, highly educated couples are more likely to report intending to leave an inheritance and the median level of such inheritances, £0.32M, is three times higher than that reported by low educated boomer couples. We document similar trends in the profile of wealth accumulation reported by couples born in the mid-late 1970s and separately consistent patterns in their expectations of future inheritance receipt. In terms of the composition of wealth portfolios we show the large disparities in wealth observed in both cohorts is attributable to the rate at which housing and especially pension wealth is accumulated. We underline the importance of parental education and housing tenure among both sets of parents, in addition to individuals' own education, for understanding the interaction between sorting and wealth accumulation. Our findings show the nature of sorting behaviour across generations has important implications for wealth inequality now and in the future.