Authors: Franziska Disslbacher and Severin Rapp
Institution: Stone Center Working Paper Series. no. 90
Date: September 2024
Abstract:
This paper leverages novel administrative data on terminal wealth in Vienna to show that Gini indices of wealth inequality at death exceed unity, with 20-30% of decedents leaving behind debt. We analyze the drivers of this distribution, finding that life-cycle effects have limited explanatory power. In contrast, bequest motives are associated with higher wealth, and a marginal increase in the share of decedents with bequest motives reduces inequality. Homeownership also correlates with higher wealth (the reverse is true for care-home residency), though housing wealth does not benefit the bottom of the distribution across districts. Finally, means-tested long-term care transfers significantly amplify terminal wealth inequality.