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WP202315-Wealth-and-welfare-across-generations.pdf
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Although older generations have substantially more wealth than their recent predecessors did at the same age, younger generations do not. Bringing together UK data on those born between the 1930s and 1980s and a lifecycle model of saving, I quantify whether this is due to changes in preferences or changes in the circumstances each generation has faced. Changing circumstances can rationalise slowing generation-on-generation wealth growth. I find no evidence that later-born generations are less patient. I quantify the implications of changing circumstances for consumption and welfare. Later-born generations are predicted to have higher consumption, despite accumulating no greater wealth, than their predecessors because their earnings are more ‘backloaded’, they have fewer children, and face lower taxation.
Authors
![David Sturrock](/sites/default/files/styles/square_desktop/public/2022-10/David_Sturrock_2%20-%20Copy.jpg?itok=P-GeTjhs)
Senior Research Economist
David’s research covers household wealth, intergenerational transfers, social mobility, pensions taxation, and health and work at older ages.
Working Paper details
- DOI
- 10.1920/wp.ifs.2023.1523
- Publisher
- Institute for Fiscal Studies
Suggested citation
Sturrock, D. (2023). Wealth and welfare across generations. 23/15. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/wealth-and-welfare-across-generations (accessed: 30 June 2024).
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