Who Reaches the Top? Intergenerational Wealth Transfers, Wealth Inequality and Wealth Mobility in the United States

Abstract

In the Panel Study of Income Dynamics (2001–2023), wealth transfers concentrate at the top. By the end of working life, 66% of the top wealth decile report an inter vivos gift or inheritance, against 41–50% in the middle wealth deciles. Among recipients, top wealth decile receipts average 14% of lifetime earnings, against 5–9% in the middle. Yet redistributing wealth transfers equally cuts within-cohort wealth inequality only by 6%, and the transfers account for 19% of intergenerational and 10% of intragenerational wealth persistence. The reason is timing: wealth transfers arrive after within-cohort wealth ranks have largely settled. A decade before the median first receipt, recipients who reach the top wealth decile hold a median wealth rank of 89 in their birth cohort. An event study around each receipt finds a persistent but very small effect on wealth ranks. If family wealth decides who reaches the top, it does so earlier in the lifecycle and in forms the PSID does not record.