RES: The "law" of wealth concentration

Doug Henwood dhenwood at panix.com
Thu Aug 17 18:15:58 PDT 2000


Lisa & Ian Murray wrote:


>According to research cited in IW in A, there is some controversy over the
>20/80 effect which is linked to models of life cycle wealth. Some say 20%
>of our total wealth is inherited with 80% life cycle accumulation; others
>saying just the opposite.

As I recall - and it's been a while - Modigliani argued against a high inheritance estimate, no doubt because he was fond of his life cycle hypothesis. I don't recall the divisions being as stark as this, though; I recall 50% being quite a conservative estimate.

Doug



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