GARBINTI Bertrand

We estimate the intergenerational correlation in homeownership status between two generations for cohorts covering the 20th century. First, we find higher intergenerational correlation in France compared to previous results obtained for the U.K. for similar cohorts. Second, the intergenerational correlation is increasing across cohorts, with a relatively stable probability of being a homeowner for children of homeowners over time, and a decreasing probability for children whose parents were not homeowners. Third, the effect of parents' tenure status is persistent over the children's life cycle. Fourth, when isolating two subpopulations based on the receipt of intergenerational transfers, we find significant intergenerational correlation in tenure status for children who did not receive any gift or inheritance, as well as for children who received intergenerational transfers, suggesting that other factors such as intergenerational income correlation or the transmission of preferences might also explain this intergenerational correlation.

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Measuring and understanding the evolution of wealth inequality is a key challenge for researchers, policy makers, and the general public. This paper breaks new ground on this topic by presenting a new method to estimate and study wealth inequality. This method combines fiscal data with household surveys and national accounts in order to provide annual wealth distribution series, with detailed breakdowns by percentiles, age and assets. Using the case of France as an illustration, we show that the resulting series can be used to better analyze the evolution and the determinants of wealth inequality dynamics over the 1970-2014 period. We show that the decline in wealth inequality ends in the early 1980s, marking the beginning of a rise in the top 1% wealth share, though with significant fluctuations due largely to asset price movements. Rising inequality in saving rates coupled with highly stratified rates of returns has led to rising wealth concentration in spite of the opposing effect of house price increases. We develop a simple simulation model highlighting how changes in the combination of unequal saving rates, rates of return and labor earnings that occurred in the early 1980s generated large multiplicative effects that led to radically different steady-state levels of wealth inequality. Taking advantage of the joint distribution of income and wealth, we show that top wealth holders are almost exclusively top capital earners, and less and less are made up of top labor earners. it has become increasingly difficult in recent decades to access top wealth groups with one’s labor income only.

This data appendix provides methodological details and complete data series for our paper “Income Inequality in France, 1900-2014: Evidence from Distributional National Accounts (DINA)”. It is supplemented by a set of data files and computer codes (GGP2017DINA.zip).

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Abstract Measuring and understanding the evolution of wealth inequality is a key challenge for researchers, policy makers, and the general public. This paper breaks new ground on this topic by presenting a new method to estimate and study wealth inequality. This method combines fiscal data with household surveys and national accounts in order to provide annual wealth distribution series, with detailed breakdowns by percentiles, age, and assets. Using the case of France as an illustration, we show that the resulting series can be used to better analyze the evolution and the determinants of wealth-inequality dynamics over the 1970–2014 period. We show that the decline in wealth inequality ends in the early 1980s, marking the beginning of a rise in the top 1% wealth share, though with significant fluctuations due largely to asset price movements. Rising inequality in savings rates coupled with highly stratified rates of returns has led to rising wealth concentration in spite of the opposing effect of house price increases. We develop a simple simulation model highlighting how changes in the combination of unequal savings rates, rates of return, and labor earnings that occurred in the early 1980s generated large multiplicative effects that led to radically different steady-state levels of wealth inequality. Taking advantage of the joint distribution of income and wealth, we show that top wealth holders are almost exclusively top capital earners, and increasingly fewer are made up of top labor earners. it has become increasingly difficult in recent decades to access top wealth groups with one's labor income only.

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This article sheds light on the long-term evolution of income and wealth inequalities and their relationship in France. After a sharp decline in inequality that started at the beginning of the First World War, an uneven trend has emerged (and continues) since the mid-1980s. The historical perspective helps to illustrate how small changes in inequalities in savings rates, returns to work or income can have strong long-term effects on wealth concentration. Two other major trends have been observed since the 1970s. One is the decline in the gender gap in labor income, although it remains high. The other is the increased difficulty for those with only labor income to access the highest wealth. Finally, our comparisons between France and the United States show that wealth and income inequalities were comparable or even lower in the United States before the 1970s. The U.S. has become much more unequal now.

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Measuring and understanding the evolution of wealth inequality is a key challenge for researchers, policy makers, and the general public. This paper breaks new ground on this topic by presenting a new method to estimate and study wealth inequality. This method combines fiscal data with household surveys and national accounts in order to provide annual wealth distribution series, with detailed breakdowns by percentiles, age and assets. Using the case of France as an illustration, we show that the resulting series can be used to better analyze the evolution and the determinants of wealth inequality dynamics over the 1970-2014 period. We show that the decline in wealth inequality ends in the early 1980s, marking the beginning of a rise in the top 1% wealth share, though with significant fluctuations due largely to asset price movements. Rising inequality in saving rates coupled with highly stratified rates of returns has led to rising wealth concentration in spite of the opposing effect of house price increases. We develop a simple simulation model highlighting how changes in the combination of unequal saving rates, rates of return and labor earnings that occurred in the early 1980s generated large multiplicative effects that led to radically different steady-state levels of wealth inequality. Taking advantage of the joint distribution of income and wealth, we show that top wealth holders are almost exclusively top capital earners, and less and less are made up of top labor earners. it has become increasingly difficult in recent decades to access top wealth groups with one's labor income only.

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This paper presents "Distributional National Accounts" (DINA) for France. That is, we combine national accounts, tax and survey data in a comprehensive and consistent manner to build homogenous annual series on the distribution of national income by percentiles over the 1900-2014 period, with detailed breakdown by age, gender and income categories over the 1970-2014 period. Our DINA-based estimates allow for a much richer analysis of the long-run pattern found in previous tax-based series, i.e. a long-run decline in income inequality, largely due to a sharp drop in the concentration of wealth and capital income following the 1914-1945 capital shocks. First, our new series deliver higher inequality levels than the usual tax-based series for the recent decades, because the latter miss a rising part of capital income. Growth incidence curves look dramatically different for the 1950-1983 and 1983-2014 sub-periods. We also show that it has become increasingly difficult in recent decades to access top wealth groups with labor income only. Next, gender inequality in labor income declined in recent decades, albeit fairly slowly among top labor incomes E.g. female share among top 0.1% earners was only 12% in 2012 (vs. 7% in 1994 and 5% in 1970). Finally, we find that distributional changes can have large impact on comparisons of well-being across countries. E.g. average pre-tax income among bottom 50% adults is 30% larger in France than in the U.S., in spite of the fact that aggregate per adult national income is 30% smaller in France.

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This paper provides historical series on the evolution of the share of inherited wealth in aggregate private wealth in Europe (France, the UK, Germany, Sweden) and the USA over the 1900–2010 period. Until 1910, the inheritance share was very high in Europe (70–80%). It then fell abruptly following the 1914–45 shocks, down to about 30–40% during the 1950–80 period, and is back to 50–60% (and rising) since around 2010. The US pattern also appears to be U-shaped, albeit less marked, and with significant uncertainty regarding recent trends, due to data limitations. We discuss possible interpretations for these long-run patterns.

The first chapter of this thesis addresses the question of the relationship between the savings rate and current and permanent income. Using several measures of permanent income, we show that, regardless of the definition of income used, the better-off save more. The second chapter focuses on the impact of intergenerational transfers on the purchase of the principal residence and on business creation. We show that households having received a gift or an inheritance buy their primary residence more frequently. For business creation, the effect of the donation remains significant while that of the inheritance is no longer significant. The third chapter extends this analysis by studying the link between inheritance and retirement. By focusing our analysis on individuals aged 55 to 65 who received an inheritance, we show that the probability of retirement increases significantly the year of receipt of the inheritance, compared to a later receipt. We also show the importance of risk aversion in the role played by inheritance on retirement. The fourth chapter studies the economic consequences of divorce and PACS breakup. Our results suggest that, contrary to popular belief, it is not the number of children that has the most important effect on these variations, but rather the differences in income between spouses before separation. Government transfers play an important role, as do the massive returns to the labor market of ex-spouses who were unemployed one year before the divorce (mainly women).

This paper combines different sources and methods (income tax data, inheritance registers, national accounts, wealth surveys) in order to deliver consistent, unified wealth distribution series by percentiles for France over the 1800-2014 period, with detailed breakdowns by age, gender, income and assets over the 1970-2014 sub-period. We find a large decline of the top 10% wealth share from the 1910s to the 1980s (from 80-90% of total wealth during the 19th century up until World War 1, down to 50-60% in the 1980s), mostly to the benefit of the middle 40% of the distribution (the bottom 50% wealth share is always less than 10%). Since the 1980s-90s, we observe a moderate rise of wealth concentration, with large fluctuations due to asset price movements. In effect, rising inequality in saving rates and rates of return pushes toward rising wealth concentration, in spite of the contradictory effect of housing prices. We develop a simple simulation model highlighting how the combination of unequal saving rates, rates of return and labor earnings leads to large multiplicative effects and high steady-state wealth concentration. Small changes in the key parameters appear to matter a lot for long-run inequality. We discuss the conditions under which rising concentration is likely to continue in the coming decades.

This data appendix provides methodological details and complete data series for our paper “Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014)”. It is supplemented by a set of data files and computer codes (GGP2016Wealth.zip).

This article consists of an extensive review of the international empirical literature with the aim of showing to what extent the existence of a compensatory allowance between ex-spouses at the time of a divorce has an empirical (statistical) basis. Two main aspects of this literature are examined: first, the fact that the compensation is subject to a condition of inequality in the standard of living between the former spouses at the time of the divorce, and second, the fact that the calculation of the benefit can be made with regard to the former spouses' previous professional choices. Our analysis shows that while the empirical literature is largely in agreement on the issue of inequality of standard of living, the empirical justification of the link between compensation and previous occupational choices is much less well established.

In France, the wealth gap is growing between the older and younger generations, who are also inheriting more and more at a later age. Various tax measures have attempted to address this imbalance. In 2007, for example, the deduction on transfers to children was multiplied by three and raised to 150,000 euros. Since then, it has been reduced to 100,000 euros. Several studies show that parents are sensitive to the tax advantages granted to donations. Nevertheless, one may wonder about the impact of such transfers: how are donations, especially early ones, used? This article reminds us of the growing importance of transfers and wealth inequalities between generations in France. Data from the Insee Patrimoine 2010 survey are then used to study the impact of different forms of transfers (inter vivos or at death) on two key behaviors of the younger generations: the purchase of a primary residence and the creation of a business. We show that the probability of starting or taking over a business is higher when a gift has been received but not if an inheritance has been received. The probability of buying one's home increases with both forms of transfer. We propose several measures of the intensity of the link between transfers and investments. The link is stronger when the recipient of the transfer is young. The increase in real estate prices in the 2000s is said to be accompanied by a strengthening of the link between gifts and home purchases. Finally, we address the question of the causal effect of the gift: does the gift promote the decision to buy a home or does it accompany a decision that has already been made? We use the fact that the probability of receiving a donation decreases with the size of the siblings to show that the causal effect of the donation turns out to be higher than the effects previously identified.

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