Inheritances and the Accumulation of Wealth in the Eurozone

Working paper
[2016 · gemeinsam mit Stefan Humer & Mathias Moser]

This paper assesses the role of earned income and inheritances for household wealth accumulation in the Eurozone. We use data from the Household Finance and Consumption Survey (HFCS) and apply unconditional quantile regressions with a set of sociodemographic covariates and controls for between–country differences in household composition. Our findings suggest that inheritances gain in importance along the wealth distribution in most countries. On average, the receipt of inheritance corresponds to an increase of 40 percentiles in the national income distribution. Contrasting country-specific estimates with the Eurozone average, we identify significant differences in the relative importance of earned income and inheritances for wealth accumulation across countries.

Out of balance? Revisiting the nexus of income inequality and current account imbalances after the Great Recession

Cambridge Journal of Economics, Vol. 46, No. 1, pp. 133-165
[2021 · gemeinsam mit Fabio Ascione]
DOI: 10.1093/cje/beab044
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Rising current account imbalances around the globe preceded the Great Recession in the late 2000s. These imbalances narrowed significantly during the crisis mainly due to a negative demand shock and plummeting imports in deficit countries. While income inequality and household debt played a pivotal role in current account imbalances prior to the crisis, it is unclear whether these relations still hold when including the post-crisis era. We estimate current account determinants using a panel of 31 OECD countries over 45 years and include measures for functional and personal income distribution as well as household debt. We find a sustained relation between income inequality and current accounts when including the post-crisis period, while the link to household debt diminishes, indicating a change in the debt regime in a number of countries.

Emissions inequality: Disparities in income, expenditure, and the carbon footprint in Austria

Ecological Economics, Vol. 197, No. 7, pp. 107435
[2022 · gemeinsam mit Stefan Humer, Mathias Moser & Hendrik Theine]
DOI: 10.1016/j.ecolecon.2022.107435
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The social consequences of carbon taxation are closely related to the income and expenditure patterns of private households. This paper combines the national Household Budget Survey with EXIOBASE3 emissions data to analyse the distribution of the carbon footprint in Austria. The data indicate a strong variation in greenhouse gas (CO2e) emissions along the income distribution, with the top income decile emitting 4.1 times more than the bottom income decile. We distinguish between local, EU-based, and other (RoW) emissions and study how various approaches to CO2e taxation would affect households with different incomes. Finally, we compare the implications of taxing direct domestic emissions only versus taxing the carbon footprint and find socio-demographic factors that explain why some households have higher tax-to-income ratios. Socially balanced carbon mitigation policies should focus on these emitters as they might be particularly exposed to CO2e taxation.

Property and power: lessons from Piketty and new insights from the HFCS

European Journal of Economics and Economic Policies, Vol. 12, No. 2, pp. 204-219
[2015 · gemeinsam mit Miriam Rehm]
DOI: 10.4337/ejeep.2015.02.06
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This paper argues that the cumulative causation processes between wealth and power risk leading to an escalation of wealth inequality. Piketty’s historical description of this development from administrative data for individual countries is corroborated with new survey data for the eurozone, the Household Finance and Consumption Survey (HFCS). Wealth is extremely unequally distributed in the eurozone – much more so than income. Furthermore, we provide a multi-faceted picture of wealth distribution in Europe using the socio-economic characteristics available in the HFCS, and we show that inheritances are the single most important factor for wealth inequality. The structural power to shape economic and political institutions is thus ever more concentrated. Finally, we discuss three channels through which the unequal distribution of private assets may affect power relations and economic activity.

Socioeconomic structures of the Austrian wealth distribution

Empirica, Vol. 42, No. 2, pp. 269-289
[2015 · gemeinsam mit Stefan Humer & Mathias Moser]
DOI: 10.1007/s10663-015-9293-3
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This paper provides first–time insights into the socioeconomic specifics of the Austrian wealth distribution. Based on data from the Household Finance and Consumption Survey 2010, we explore patterns of household characteristics associated with the wealth dispersion. Due to the pronounced nonlinear relationship of wealth, we incorporate the complex survey design in quantile regressions to analyze the joint distribution of specific attributes and households net wealth position. Our findings emphasize the role of age, education, the ownership of a main residence and company stakes in order to identify generic households across the distribution. Looking at the top, the results indicate a specific role of being self-employed or having received inheritances.

Teaching wealth inequality in the Eurozone: An outline based on HFCS data

International Journal of Pluralism and Economics Education, Vol. 9, No. 1/2, pp. 168-191
[2018]
DOI: 10.1504/IJPEE.2018.10013525
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This paper presents an outline for an undergraduate course on wealth inequality with nine learning goals. Based on empirical evidence from the Eurozone Household Finance and Consumption Survey 2010 (HFCS), wealth inequality is introduced as a distinct field of study. The outline concisely illustrates the challenges of empirical research when collecting wealth data and measuring wealth inequality. By reference to recent literature, particular attention is paid to intergenerational wealth transfers. Finally, the paper presents several tools for interactive teaching.

Do capital and labor have converging views on industrial relations? Exploring perception mismatches between management and employee representatives

Working paper
[2023]

Using data from the European Company Survey 2019, I study assessments of firm-level relations in eight European countries. The analysis focuses on the congruence or divergence of perceptions of management and employee representatives in three dimensions: the management-employee relationship in general, influence of employee representation on management decisions, and the level of mutual trust. The findings suggest considerable perception gaps with regard to relation and trust, with management being more positive than employee representatives across all countries. Assessments and perception mismatches for the influence of employee representations on management decisions are more ambiguous between the two groups.

Digitalization, Industry Concentration, and Productivity in Germany

Journal of Economics and Statistics, Vol. 241, No. 5-6, pp. 623-665
[2021 · gemeinsam mit Benjamin Ferschli, Miriam Rehm & Stella Zilian]
DOI: 10.1515/jbnst-2020-0058
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This paper investigates the links of digitalization and industry concentration with labor productivity at the sectoral level in Germany. Combining data for digitalization and labor productivity from the EU KLEMS database with firm-level data from the CompNet and Orbis Bureau Van Dijk databases to construct industry concentration measures between 2000 to 2015, we show that (1) the German economy appears to have digitized since 2000, and (2) there is no clear-cut relationship between digitalization and market concentration at the industry level. Using a time and sector fixed effects model and controlling for capital intensity, however, we find evidence for (3) a positive effect of both lagged industry concentration and lagged digitalization on productivity at the sectoral level in Germany. This finding is robust to alternative measures of digitalization and industry concentration as well as to their interaction, but sensitive to the sector sample and to scale effects from capital intensity. We therefore cautiously conclude that recent technological change appears to have been labor-saving, and that productivity-enhancing aspects of a partial ‘superstar firm’ effect may be identified in the German economy, in particular in its manufacturing sector.

Wikipedagogy: Enhancing student motivation and collaboration in an economics class with Wikipedia

Journal of Economic Education, Vol. 53, No. 1, pp. 43-51
[2022 · gemeinsam mit Stefan Humer]
DOI: 10.1080/00220485.2021.2004273
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Wikipedia is not only a source of knowledge and a medium for communicating research but also opens new avenues for teaching in academia. In this article, the authors provide theoretical considerations and practical guidance for setting up a postgraduate economics course where students disseminate research on income inequality in Europe to a greater audience on Wikipedia. Publishing in the well-known and widely-used online encyclopedia has been shown to have a lasting impact on student motivation. Moreover, the authors assess the benefits of reciprocal feedback options and collaborative editing, and also the costs that accompany Wikipedia.

The Micro-Macro Gap in Property Incomes: Consequences for Household Income Inequality

Journal of Income Distribution, Vol. 28, No. 3
[2023 · gemeinsam mit Michael Ertl, Stefan Humer & Mathias Moser]
DOI: 10.25071/1874-6322.40392
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This paper analyzes the mismatch of capital income information between household surveys and macro aggregates in the Eurozone. We contrast data from recent EU-SILC and HFCS waves with Eurostat national accounts for single components of capital income. We find a considerable gap between micro and macro data even when carefully considering comparability issues. On average, EU-SILC and HFCS cover only 26% and 22% of national accounts totals in the Eurozone countries. We further assess which amount of this gap that can be traced back to (a) the undercoverage of the top in survey data and (b) general underreporting of capital income across the distribution. To calculate augmented capital incomes, we utilize wealth information from HFCS and apply Pareto estimations and varying rates of return to capital.

Macroeconomic effects of a declining wage share: A meta-analysis of the functional income distribution and aggregate demand

Journal of Economic Surveys, Vol. 39, No. 1, pp. 280-325
[2025 · gemeinsam mit Quirin Dammerer, Ludwig List & Miriam Rehm]
DOI: 10.1111/joes.12614
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This paper reviews the theoretical and empirical literature on the relationship between the functional distribution of income and aggregate demand, which investigates whether declining wage shares increase (‘profit-led’) or decrease (‘wage-led’) demand. It conducts a meta-regression analysis of 33 studies with 578 estimates for total and domestic demand, covering up to 163 years and 59 countries and regions. Our results suggest that, on average and across all countries, total demand is predominantly profit-led and domestic demand mainly wage-led. The effects in the literature range between 0.8 and -0.3 within one standard deviation for domestic demand and between 0.4 and -0.7 for total demand, which are economically significant at the outer bounds. We find mixed evidence for publication selectivity, which may affect the size but not the direction of the results in the literature. If one was to nonetheless correct for this, then total demand would be less profit-led or statistically insignificant. A set of moderator variables, including publication characteristics, estimation strategies, the covariates included in the studies’ estimation functions, and, in particular, controls for time and space, help explain the variation in the empirical estimates.

Quality Assessment of Imputations in Administrative Data

Journal of Official Statistics, Vol. 31, No. 2, pp. 231-247
[2015 · gemeinsam mit Franz Astleithner, Predrag Cetkovic, Stefan Humer, Manuela Lenk & Mathias Moser]
DOI: 10.1515/JOS-2015-0015
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This article contributes a framework for the quality assessment of imputations within a broader structure to evaluate the quality of register-based data. Four quality-related hyperdimensions examine the data processing from the raw-data level to the final statistics. Our focus lies on the quality assessment of different imputation steps and their influence on overall data quality. We suggest classification rates as a measure of accuracy of imputation and derive several computational approaches.

What did you really earn last year? Explaining measurement error in survey income data

Journal of the Royal Statistical Society - Series A, Vol. 82, No. 4, pp. 1411-1437
[2019 · gemeinsam mit Stefan Angel, Franziska Disslbacher & Stefan Humer]
DOI: 10.1111/rssa.12463
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The paper analyses the sources of income measurement error in surveys with a unique data set. We use the Austrian 2008–2011 waves of the European Union ‘Statistics on income and living conditions’ survey which provide individual information on wages, pensions and unemployment benefits from survey interviews and officially linked administrative records. Thus, we do not have to fall back on complex two-sample matching procedures like related studies. We empirically investigate four sources of measurement error, namely social desirability, sociodemographic characteristics of the respondent, the survey design and the presence of learning effects. We find strong evidence for a social desirability bias in income reporting, whereas the presence of learning effects is mixed and depends on the type of income under consideration. An Owen value decomposition reveals that social desirability is a major explanation of misreporting in wages and pensions, whereas sociodemographic characteristics are most relevant for mismatches in unemployment benefits.

Intergenerational transmission of socioeconomic conditions in Austria in the context of European welfare regimes

Momentum Quarterly, Vol. 2, No. 3, pp. 108-126
[2013 · gemeinsam mit Wilfried Altzinger]
DOI: 10.15203/momentumquarterly.vol2.no3.p108-126
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This paper uses data from the European Union Statistics on Income and Living Conditions (EU-SILC) 2005 to analyze intergenerational income mobility in Austria compared to other European Union members. Applying various methodological approaches, the data reveal substantial differences in intergenerational income persistence across European welfare regimes. The results show that income class rigidities are much less evident in Nordic countries compared to other European countries including Austria.

A Tale of Integration: The Migrant Wealth Gap in Austria

European Journal of Population, Vol. 38, pp. 163–190
[2022 · gemeinsam mit Mattias Muckenhuber & Miriam Rehm]
DOI: 10.1007/s10680-021-09604-1
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We investigate how previous generations of migrants and their children integrated into Austrian society, as measured by their wealth ownership. Using individual-level data from the Household Finance and Consumption Survey (HFCS), we document (1) a positive average migrant wealth gap between migrants and natives – that is, migrants owning less wealth than natives, especially in the upper half of the distribution, (2) substantial within-group inequality for migrants, and (3) evidence for catch-up, since second generation migrants are much more similar to natives in terms of wealth and socio-economic characteristics than first generation migrants. Using a RIF regression, we confirm an economically significant migrant wealth gap for first generation migrants after controlling for socio-economic characteristics especially for the upper middle of the distribution, where housing wealth is a particularly relevant asset category. Second generation migrants’ wealth gap is fully explained by our covariates in the middle of the distribution, whereas at the top where business wealth is more salient, their characteristics predict them to have higher wealth than natives. Decomposing the partial effects of covariates suggests that inheritances have the highest explanatory power for the migrant wealth gap of both first and second generation migrants, further buttressing the case for progressive integration in terms of wealth, while the composition of the migrant population, and in particular migrants’ heritage may continue to play a role in their wealth ownership.

On Top of the Top: A Generalized Approach to the Estimation of Wealth Distributions

Working paper
[2022 · gemeinsam mit Franziska Disslbacher, Michael Ertl, Emanuel List & Patrick Mokre]

The wealth distribution is infamously top-heavy, while the decisive upper tail is missing from survey data on household wealth in European countries. We provide a novel quantile regression approach to estimate all parameters of the Pareto and Generalized Pareto distribution to adjust for the rich missing in survey data due to differential non-response and under-reporting. In contrast to prior Pareto-based adjustment approaches, our generalized and rules-based method is scalable, flexible in the face of heterogeneities in data quality and wealth accumulation regimes, transparent, and prevents over-shooting of wealth aggregates and wealth concentration estimates. We apply the method to data on fourteen Eurozone countries by supplementing the Household Finance and Consumption Survey (HFCS) with a novel database on country-specific rich lists from the European Rich List Database (ERLDB) compiled for this paper. The magnitude of the resulting upper-tail adjustments varies substantially across countries, highlighting the importance of the rules-based method developed here. In addition, while our approach is highly stable across an extensive range of sensitivity tests addressing the opacities of ERLDB data, the resulting estimates vary substantially across a significant range of parameters borrowed from prior work.

The Income–Inequality Nexus in a Developed Country: Small-Scale Regional Evidence from Austria

Regional Studies, Vol. 51, No. 3, pp. 454-466
[2017 · gemeinsam mit Mathias Moser]
DOI: 10.1080/00343404.2015.1103848
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This paper analyses the relationship between regional inequality and average income in a small-scale framework for Austria. The empirical findings are based on a novel inequality database generated from individual wage tax information at the municipality level. This study researches the magnitude of regional spillovers of income and inequality using spatial econometric methods. The results show a pronounced positive relation between regional income levels and inequality, where especially high-income municipalities exhibit a large spread in the income distribution. Furthermore, it shows that higher levels of inequality are associated with income gains at the top of the distribution.

Highbrow heritage: the effects of early childhood cultural capital on wealth

Review of Economics of the Household, Vol. 24, pp. 359–393
[2024 · gemeinsam mit Eva Six]
DOI: 10.1007/s11150-024-09733-6
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Does exposure to cultural capital in early childhood—in other words, having access to and familiarity with norms of highbrow culture—affect wealth accumulation later in life? We use data from the Household Finance and Consumption Survey (HFCS) to examine the relationship between various forms of cultural capital and wealth holdings in Austria. According to structural equation models, three indicators of cultural family background—the father’s educational attainment, the number of books in the parental household, and regular attendance of cultural activities at the age of ten—are positively correlated with net wealth. While education and income are key channels through which cultural capital affects wealth, we also observe direct effects in several specifications. The results are more marked within the over-50 cohort, suggesting that cultural capital’s role in wealth accumulation might have attenuated over decades of social change and educational expansion.

Fairness Perceptions of Wealth Inequality in Europe

Review of Income and Wealth, Vol. 71, No. 3, pp. e70026
[2025 · gemeinsam mit Julia Hofmann & Markus Marterbauer]
DOI: 10.1111/roiw.70026
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Wealth inequality exceeds income inequality in all European countries, raising the question of whether people perceive such disparities as fair. This paper examines fairness perceptions of wealth distribution in 29 European countries by combining the European Social Survey (ESS) with data from the World Inequality Database (WID) and Eurostat. We estimate ordered logistic mixed-effects models to identify macro and micro variables that are linked to fairness assessments of wealth disparities. At the macro level, wealth inequality is perceived as more unfair where wealth concentration is higher, which contrasts with previous findings for income inequality. At the micro level, individuals who endorse principles of equality, equity, and need tend to oppose large wealth disparities. Additionally, individuals in higher social classes are more likely to perceive wealth inequality as unfair, supporting the status-legitimacy hypothesis.

Social mix and the city: Council housing and neighborhood income inequality in Vienna

Urban Studies, Vol. 60, No. 4, pp. 752-769
[2022 · gemeinsam mit Tamara Premrov]
DOI: 10.1177/00420980221119408
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The Austrian capital of Vienna is widely acknowledged as one of the most livable cities, featuring a unique model of council housing that accounts for roughly 25% of all residential dwellings. This paper studies whether the broad provision of council housing is linked with a higher social mix in the neighbourhood. The analysis is based on administrative wage tax data at a small-scale raster grid of 500 × 500 meter with neighbourhood income inequality as an indicator for the social mix. While council housing is widely spread across the city, we find distinct spatial clusters of high and low income and inequality. Spatial econometric models show that council housing in Vienna is associated with lower income areas but slightly correlates with higher neighbourhood income inequality. These findings suggest that well-designed public housing policies may contribute to a higher social mix in a city.

Erbschaften in Österreich: eine Modellschätzung intergenerationeller Vermögenstransfers bis 2050

Wirtschaft und Gesellschaft, Vol. 50, No. 1, pp. 21-41
[2024 · gemeinsam mit Klaus Grünberger & Judith Derndorfer]
DOI: 10.59288/wug501.230
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Seit dem Ende der Erbschaft- und Schenkungsteuer 2008 gibt es in Österreich kaum Daten über die Verteilung und das Volumen von Erbschaften. Freiwillige Haushaltserhebungen erfassen vergangene Erbschaften, aber es mangelt an aktuellen Werten sowie an Prognosen über die zukünftige Erbschaftsentwicklung. Auf Basis der Vermögenserhebung HFCS und des Mikrosimulationsmodells INTAXMOD wird in diesem Beitrag das jährlich vererbte Vermögen sowie das potenzielle Steueraufkommen bis 2050 geschätzt. Die Ergebnisse zeigen (a) eine Verdoppelung des jährlichen Erbvolumens zwischen 2025 und 2050 von rund 21 auf 41 Mrd. Euro, (b) eine starke Konzentration im obersten Perzentil der Erbschaftsverteilung und (c) potenzielle Steueraufkommen von über 1 Mrd. Euro pro Jahr bei Tarifen mit Freibeträgen von 1 Mio. Euro.