General Article Inherited wealth and inequality

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By Richard Exell

Inherited wealth makes the UK an even more unequal country than some of us had realised. Most of the time, egalitarians like me tend to concentrate our worrying on unequal incomes, but every so often something new reminds us about other forms of inequality.
One of these prompts is Recent trends in the size and the distribution of inherited wealth in the UK, a new study by Eleni Karagiannaki from the Centre for the Analysis of Social Exclusion at the London School of Economics, which shows that on a common measure of inequality, inherited wealth is two or three times as unequal as incomes.
This study of inherited wealth from 1984 to 2005 found that rising house prices pushed up the value of inheritances from being worth 3% of GDP in 1984 to about 4.3% in 2005 and there is a ‘high degree of inequality’ in the distribution of inheritances.
A common measure of inequality is the Gini coefficient – a society with perfect equality would have a Gini coefficient of 0.00, one w...

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