布鲁盖尔研究所-财富分配与社会流动（英文）-2021.3-108页_730kb

Summary of "Wealth distribution and social mobility"

Core Content

This report by Eurofound, authored by Zsolt Darvas and Catarina Midoes (Bruegel), explores the relationship between wealth distribution and social mobility across 27 EU Member States and other countries. It provides insights into how wealth affects opportunities, the persistence of wealth across generations, and the role of housing in wealth inequality. The findings are based on data from the Household Finance and Consumption Survey (HFCS), the Survey of Health, Ageing and Retirement in Europe (SHARE), and the Luxembourg Wealth Study (LWS).

Main Concepts and Findings

Wealth and Inequality

• Wealth is more unequally distributed than income and is highly concentrated among the wealthiest households.
• In 14 countries observed over three waves (2010, 2014, 2017), wealth inequality remained largely unchanged.
• In four countries (Finland, Greece, Slovakia, Slovenia), wealth inequality increased significantly, while it decreased in Latvia and Poland.
• In 21 HFCS countries, wealth inequality was lowest in eastern and southern Member States and highest in Austria, Cyprus, Germany, and the Netherlands.
• On average, the top wealth quintile holds 60 times more assets than the bottom quintile.
• Over 4% of the population in these countries has negative net wealth, often due to youth, low income, unemployment, and reliance on private loans.

Housing and Homeownership

• Homeownership is more common in countries with lower wealth inequality.
• Excluding real estate and mortgage debt from wealth calculations increases inequality, suggesting homeownership has an equalising effect.
• Renters are generally less wealthy than homeowners, with very few renters belonging to the top wealth quintile.
• The main residence accounts for over half of total gross assets for the bottom 80% of households, while the wealthiest 20% have 42% of their assets in housing.
• Homeowners who inherit property are rarely found in the bottom wealth quintile, indicating wealth persistence.

Social Mobility

• Wealth persists across generations, with individuals from wealthier households more likely to be wealthy themselves.
• Higher education is strongly correlated with wealth outcomes, and having a tertiary-educated parent significantly increases the likelihood of descendants completing tertiary education.
• Parental wealth provides both financial support and better living conditions, which enhance educational attainment and social mobility.
• In several countries, the average wealth gain from inheritance is greater than that from having a university degree compared to only primary education.

Policy Implications

• Monitoring wealth distribution is essential for designing fair social policies.
• Compulsory wealth declarations can help in identifying hidden wealth and improving financial transparency.
• Coordinating wealth-related taxes can reduce tax evasion and promote fairness.
• Financial literacy initiatives can encourage asset diversification, especially among poorer populations.
• Public policies should focus on equal opportunities, including securing good living conditions during childhood, ensuring minimum educational attainment, and promoting access to higher education.
• Housing policies should aim to increase supply in cities, improve public transport, and incentivise teleworking to reduce pressure on urban areas.
• A balance between supporting homeownership and providing public housing is crucial for social equity.

EU Policy Context

• The EU's growth strategies, such as the Lisbon and Europe 2020 strategies, aim for inclusive growth and poverty reduction, but have faced challenges in achieving these goals.
• The 'at risk of poverty' rate, a key indicator, reflects income inequality rather than absolute poverty, and wealth research can complement this by offering a more comprehensive view of living standards.
• The European Pillar of Social Rights emphasizes equal opportunities, fair working conditions, and social protection, and wealth research can support these principles by highlighting the role of wealth in shaping opportunities.
• Fair taxation and understanding the impact of wealth on social mobility are central to the EU's social and economic policies.

Key Contributions of the Report

• Utilizes household-level data from three major datasets: HFCS, SHARE, and LWS.
• Expands the geographical scope of previous research to include up to 22 EU countries.
• Analyzes the gender wealth gap and the composition of wealth across different income levels.
• Investigates the impact of wealth and education on social mobility and identifies country-specific differences.
• Assesses the policy implications of findings, contrasting with earlier literature.

Conclusion

The report underscores the significant role of wealth in shaping social mobility and inequality. It highlights the need for policies that address wealth disparities, promote financial literacy, and ensure fair access to resources. By integrating wealth data into policy discussions, the EU can better understand and tackle the challenges of inequality and poverty, especially in the context of the COVID-19 pandemic.