In Pride and Prejudice, Jane Austen didn’t need to explain to 19th-century readers why Mr. Bingley’s "four or five thousand a year" so excited Mrs. Bennet. It was self-evident: Mr. Bingley was an heir, and in those days, the surest way to wealth was not hard work but a fortunate marriage.
Fast forward to the present, and it becomes clear that wealthy countries are once again drifting toward an Austen-era reality. Inheritance is regaining prominence, and this shift is bound to reshape both the economy and the social fabric of society.
The Return of Inheritance
Official statistics provide little data on inheritances, as government surveys struggle to account for large one-time transfers. However, research on the "inheritance flow"—the total value of wealth passed down to heirs, including cash, artwork, real estate, and more—suggests that in 1900, inheritances exceeded 20% of GDP in some countries, as vast estates and stock holdings were routinely passed down. Over the 20th century, inheritance declined as a share of the economy, but in recent decades, it has been rising again. By the late 2010s, the total value of inheritances had reached an average of 10% of GDP. This year, around $6 trillion in wealth will be transferred through inheritances across the developed world.
In many countries, the share of wealth obtained through inheritance is also increasing. According to UBS, in 2023, 53 people became billionaires through inheritance—nearly catching up with the 84 individuals who earned their billions independently. In France, annual inheritance transfers today are twice the levels seen in the 1960s; in Germany, they have nearly tripled since the 1970s. In the UK, inherited wealth relative to earnings has doubled for those born in the 1980s compared to the previous generation. In Italy, the total volume of inheritances now exceeds 15% of GDP—perhaps enough to prompt a modern-day Mrs. Bennet to take her daughters to social gatherings in Roman palazzi. Ireland remains an outlier, with relatively modest inheritance levels that have not shown significant growth.
In the U.S., for every $100 in annual wage payments, $20 comes from wealth left by the deceased. Yet even these striking figures underestimate the scale of the new "inheritocracy." Families now have fewer children on average, meaning that each inheritance is split among fewer heirs. British data show that declining birth rates in recent decades have led to a £60,000 ($75,000) increase in the average inheritance—up 24%. Of course, having siblings is wonderful, but financially speaking, they "subtract" from one’s future inheritance.
Lower inheritance taxes further reinforce this trend: the smaller the tax burden, the more wealth beneficiaries retain. In the early 20th century, inheritance duties made up a significant portion of tax revenues in both the UK and the U.S. However, in the latter half of the century, politicians began rolling them back—some due to lobbying pressure, others fearing that in a globalized world, "wealth taxes" would drive the rich to relocate. Today, inheritance tax revenues account for less than 1% of government income in most developed nations. Some countries—including Australia, Canada, India, Norway, and Russia—have abolished inheritance taxes entirely. Many Americans want their government to follow suit: more than 20 U.S. states repealed wealth transfer taxes between 1976 and 2000.
"Inheritance-ocracy" in Popular Culture
The growing role of inheritance is becoming increasingly evident in mass culture. The TV series Succession portrays siblings competing for control over their father's media empire. In the film Crazy Rich Asians, the protagonist marries into a powerful Singaporean dynasty. Contemporary literature also brings inheritance to the forefront, as seen in Cynthia D’Aprix Sweeney’s The Nest and John Lanchester’s Capital, the latter featuring a heroine who unexpectedly inherits a house in London—while grieving her mother’s passing, she also finds herself in possession of "a massive pile of money."
The rise of "inheritance-ocracy" is driven by three key factors: the growth of overall wealth, demographic shifts, and slowing economic expansion.
Growth of Overall Wealth
After the two world wars, the relative value of property and assets declined sharply. Much of Europe’s infrastructure lay in ruins, high inflation eroded cash savings and government bonds, and authorities imposed heavy wealth taxes and nationalization policies. Some affluent families, like the Vanderbilts, simply squandered their fortunes. However, over time—particularly due to the soaring value of real estate (partly driven by restrictive urban planning policies that limit new construction)—wealth has rebounded. The value of UK real estate, for example, rose from just over £1 trillion (130% of GDP) in the mid-1990s to nearly £7 trillion (270% of GDP) in recent years. Wealth taxes have fallen out of favor, stock markets have delivered phenomenal returns, and inflation (until recently) remained low. Asset managers and index funds have helped affluent families avoid the fate of the Vanderbilts.
After the two world wars, the relative value of property and assets declined sharply. Much of Europe’s infrastructure lay in ruins, high inflation eroded cash savings and government bonds, and authorities imposed heavy wealth taxes and nationalization policies. Some affluent families, like the Vanderbilts, simply squandered their fortunes. However, over time—particularly due to the soaring value of real estate (partly driven by restrictive urban planning policies that limit new construction)—wealth has rebounded. The value of UK real estate, for example, rose from just over £1 trillion (130% of GDP) in the mid-1990s to nearly £7 trillion (270% of GDP) in recent years. Wealth taxes have fallen out of favor, stock markets have delivered phenomenal returns, and inflation (until recently) remained low. Asset managers and index funds have helped affluent families avoid the fate of the Vanderbilts.
Demographics
The baby boomer generation found itself in an ideal position—entering adulthood just as property and stock prices began their meteoric rise. In Germany, people over 65 make up only one-fifth of the population but control one-third of the country’s wealth. In the U.S., that same age group (baby boomers) holds half of all net wealth, valued at $82 trillion. Now, as baby boomers gradually pass away, they are leaving behind substantial inheritances for their children.
The baby boomer generation found itself in an ideal position—entering adulthood just as property and stock prices began their meteoric rise. In Germany, people over 65 make up only one-fifth of the population but control one-third of the country’s wealth. In the U.S., that same age group (baby boomers) holds half of all net wealth, valued at $82 trillion. Now, as baby boomers gradually pass away, they are leaving behind substantial inheritances for their children.
Slow Economic Growth
As early as 2014, economists Thomas Piketty and Gabriel Zucman demonstrated that the slower an economy grows, the larger the accumulated wealth relative to national income. People continue to save regularly, while GDP expands at a weaker pace. In recent years, economic growth in wealthy nations has been further hindered by aging populations and declining productivity. Our data confirms that in fast-growing economies (such as the U.S. and Ireland), "inheritance-ocracy" is less pronounced than in slower-growing ones (such as Germany and Italy).
As early as 2014, economists Thomas Piketty and Gabriel Zucman demonstrated that the slower an economy grows, the larger the accumulated wealth relative to national income. People continue to save regularly, while GDP expands at a weaker pace. In recent years, economic growth in wealthy nations has been further hindered by aging populations and declining productivity. Our data confirms that in fast-growing economies (such as the U.S. and Ireland), "inheritance-ocracy" is less pronounced than in slower-growing ones (such as Germany and Italy).
Impact on Society and the Economy
The inheritance boom is likely to further slow economic growth. As in the time of Honoré de Balzac, the path to wealth is increasingly tied not to hard work but to a fortunate marriage. In Father Goriot, one character bluntly tells another that "only a fool would choose a salary over an inheritance." According to modern research, the incomes of the wealthiest 1% of French heirs now exceed those of the wealthiest 1% of workers. If people prioritize "marriage strategies" over entrepreneurship, the pace of innovation will suffer. In fact, entrepreneurship has been in long-term decline across developed economies.
However, the most serious consequences will be felt in the social sphere, as inheritance widens the gap between rich and poor. According to statistics from the U.S. Federal Reserve, the average American in the top 5% of income earners has inherited over $500,000. Researchers Hiro Aishman (University of California, Berkeley) and Seth Neumüller (Wellesley College) estimate that inherited wealth transfers account for a quarter of the racial wealth gap between Black and White Americans.
The growing volume of inheritances is also exacerbating housing inequality—both through inheritances received after a relative’s death and through financial gifts made during their lifetime. According to financial firm Legal & General, if the "Bank of Mom and Dad" (families helping their children buy homes) were a real business, it would rank among the ten largest mortgage lenders in the U.S. Family assistance significantly increases the proportion of young homeowners. Federal Reserve data suggests that parental support boosts homeownership rates among young people by at least one-third. Naturally, those without such benefactors face much steeper challenges.
This trend is also reshaping the "marriage market." A modern equivalent of the old advice to "seek out Mr. Bingley" (with his "four or five thousand a year") may prove more practical than valuing intelligence and diligence in a potential spouse. Imagine two London millennials, both earning high post-tax incomes (around £100,000 per year)—"Heiress Isabella" and "Inheritance-Free Nancy." If both aim to buy a home in the 90th percentile price range (about £1.2 million), Isabella, whose parents have already gifted her a property, faces no problem. Meanwhile, even if Nancy saves half of her net earnings, she may spend a lifetime repaying a mortgage without reaching the same level of financial security. Many would logically prefer Isabella as a marriage partner.
Statistics confirm that wealthy heirs are increasingly marrying one another. Economists call this phenomenon "assortative mating," where people choose partners with similar social and economic backgrounds. While past studies focused on education and income as key factors in partner selection, new research shows that inheritance now plays a significant role. Étienne Pasto (formerly of the Paris School of Economics) and Junyi Zhu (Bundesbank) found that in Germany, inheritance influences spouse selection 2.5 times more than employment income. Another study on Denmark highlights the growing significance of inherited wealth in marriage patterns.
What’s Next?
The inheritance boom is likely to continue for at least another ten to fifteen years. Our estimates suggest that the peak mortality of baby boomers in the U.S. will occur in 2036, with around 1.5 million members of this generation passing away that year. Real estate and stock values are expected to keep rising, further expanding the inheritance "pile of money." In an environment of higher interest rates, an heir who invests their capital in banks or government bonds will earn passive income in the style of a classic rentier. Meanwhile, governments show little urgency in increasing, and in some cases are even reducing, inheritance taxes.
As a result, we may soon witness the emergence of a new, longer-lasting class of heirs—one potentially even more powerful than the aristocrats of Jane Austen’s era. For some, that is indeed "excellent news."