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DIE 05/19 - Incidence of inheritances in real gross wealth’s distribution in Uruguay

ISSNISSN/ISBN: 2301-1963
AutorAuthor/s: Agustoni, Bruno; Lasarga Evelin
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The present work intends to study the inheritance incidence in the distribution of real gross wealth in Uruguay, in order to quantify its importance in comparison to other wealth sources. Recent empirical evidence from Uruguay as well as previous international research shows high levels of wealth concentration, nevertheless little has been said about about the inheritance weight in our country. At an international level, the inheritance evidence and its incidence on the individuals wealth is ambiguous. The present investigation uses the Uruguayan Household Finance Survey (EFHU, in spanish) for the years 2013/2014. The empirical strategy consists on inequality indices decompositions, RIF regressions and Oaxaca-Blinder decompositions, a rarely technique applied to wealth variables. The results of the present working paper show that the percentage of inherited real wealth amounts around a third of the total, while the gross real wealth presents an accumulation in the distribution’s upper tail, getting the richest 10% a 57,11% of the wealth and the top 1% a 24,32%. These inequalities get deeper if we consider inherited real gross wealth, and a positive marginal impact of inheritance on inequality is observed. Finally, the factors that most affect the possession of wealth are inheritances, being a business owner and belong to a home with an average age over 60 years, and the educational level is a second order issue.

 
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