Wealth and inheritance in Britain from 1896 to the present

Anthony Atkinson

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: There has been a large rise in the UK ratio of personal wealth to national income. Personal wealth has grown since the 1970s about twice as fast in real terms as national income. Has this rise in the wealth-income ratio led to a corresponding increase in the wealth being passed on from one generation to the next? Are we returning to the levels of inheritance found in the 19th century? In France, the research of Thomas Piketty has highlighted the return of inheritance. The aim of this paper is to construct comparable UK evidence on the extent of the transmission of wealth in the form of estates and, insofar as it is possible, gifts inter vivos. It takes a long-run view of inheritance, starting from 1896, when the modern Estate Duty was introduced and exploits the extensive estate data published over the years in the UK. Construction of a long-run time series for more than a century is challenging, and there are important limitations to the resulting estimates which are discussed extensively in the paper. The resulting time-series demonstrates the major importance of inheritance in the UK before the First World War, when the total transmitted wealth represented some 20 per cent when expressed relative to net national income. In the inter-war period, the total was around 15 per cent, falling to some 10 per cent after the Second World War, and then falling further to below 5 per cent in the late 1970s. Since then, there has indeed been an upturn, although less marked than in France: a rise from 4.8 per cent in 1977 to 8.2 per cent in 2006. This increase was more or less in line with the increase in personal wealth, and has to be interpreted in the light of the changing net worth of the corporate and public sectors of the economy.

Keywords: wealth; inheritance; estate data (search for similar items in EconPapers)
JEL-codes: D31 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2013-11-01
New Economics Papers: this item is included in nep-his
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Citations: View citations in EconPapers (26)

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http://eprints.lse.ac.uk/58087/ Open access version. (application/pdf)

Related works:
Journal Article: Wealth and inheritance in Britain from 1896 to the present (2018)
Journal Article: Wealth and inheritance in Britain from 1896 to the present (2018)
Working Paper: Wealth and inheritance in Britain from 1896 to the present (2018)
Working Paper: Wealth and Inheritance in Britain from 1896 to the Present (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:58087

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