This paper analyses inter-generational wealth mobility in the very rich Parisian families. It is based on an
original sample on wealth at death of French top 0.1% members and their descendants. Two periods are
differentiated : 1867-1914 and 1922-1977. The micro-data set shows how dramatically the conditions of
reproduction of the elite changed ...
(Show more)This paper analyses inter-generational wealth mobility in the very rich Parisian families. It is based on an
original sample on wealth at death of French top 0.1% members and their descendants. Two periods are
differentiated : 1867-1914 and 1922-1977. The micro-data set shows how dramatically the conditions of
reproduction of the elite changed after World War I, due to macroeconomic shocks, inflation, as well as
higher inheritance taxation rates. In average downward mobility more than doubled between the two
periods. This was due first of all to shocks on asset prices. Moreover the paper shows that longevity and number of siblings - which were strong predictors of the inheritors’ wealth before 1914 – has no affect on the wealth at death anymore after 1945. The paper questions the traditionnal measure of wealth mobility (the log-log approach) and proposes an alternative measure of intergenerational wealth moblity based on the wealth rank of the deceased and the inheritor (rank-rank). We show that log-log comparison gives misleading interpretation of wealth mobility for the 1922-1977 period. Rank-rank approach is less sensitive to changes in the distribution of wealth, which makes it a better candidate for long-run comparisons.
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