The Magnitude and Correlates of Inter-vivos Transfers in the UK

This paper uses data from the British Household Panel Survey and the Attitudes to Inheritances Survey to estimate the magnitude of and the factors that are correlated with private inter-household transfers from parents to their adult children in the UK. Our evidence suggests that inter vivos transfers in the UK are fairly common although regular financial transfers may be less so. AIS suggests an aggregate value of all gifts received so far in people's lifetimes of around £83 billion in 2004. This is about one tenth of the aggregate value of inheritances reported to the same survey, or about 2.3 per cent of total wealth at the time. One section of BHPS implies an annual flow of parental transfers of only around £1.1 billion, or 4 per cent of the flow of inheritances, but other parts of the same survey imply a much greater prevalence of transfers. It appears that none of the available datasets captures the whole picture. Consistently, however, the surveys suggest that financial transfers are negatively associated with age and the income of the recipient indicating that parental transfers are reach children when help is most needed, and most for those with greater needs. However, it is the parents with greater resources who are able to do this, meaning that the process tends to reinforce intergenerational links.inter-vivos transfers, inequality, altruism

Changes in the Living Arrangements of Elderly People in Greece: 1974-1999

During the period 1974-1999 the percentage of elderly living with their children in Greece reduced from 55 per cent to about 32 per cent. In this paper we examine determinants of the decrease in intergenerational co-residence among Greek elderly people and their adult children and its implications for economic well-being. We find that the main factor that has contributed to the change in the living arrangements has been the increase in the pension incomes. Although income was the most important force driving the increase in the independent living among the elderly Greeks throughout the period under examination its contribution to the change reduced significantly during the 1990s. As the importance of incomes in accounting for changes in co-residence rates among the elderly reduces over time so the contribution of the unobserved year effect rises. This finding points to the role of changing preferences in determining intergenerational co-residence. Despite the substantial decrease in intergenerational co-residence we find that the family in Greece still plays a very significant role in protecting the poor elderly people.elderly, intergenerational living arrangements, Greece, poverty

Jobcentre Plus or minus? Exploring the performance of Jobcentre Plus for non-jobseekers

Since April 2002 Jobcentre Plus has started to operate nationwide in the UK providing fully integrated benefit claiming and work placement/job-seeking activities for people of working age. This new organisation put an explicit work-focus in the delivery of the benefit system. Along with Jobseeker’s Allowance (JSA) claimants who traditionally have been the focus of relevant work-focused policies, Jobcentre Plus targets a much wider group of clients including lone parents, disabled people and carers. Although the work-focus of the new organisation could be beneficial for clients who themselves have an explicit work orientation, its effect on clients for whom work is not a feasible option are far less clear. This paper explores whether the changes in the delivery of the benefit system introduced by Jobcentre Plus have been beneficial for claimants who are not jobseekers and assesses which aspects of the new organisation work well and which could be improved in order to address more effectively the needs of non-job-oriented clients

Rrecent trends in the size and the distribution of inherited wealth in the UK

In this paper we document the evolution of the annual flow of inheritances in the UK during the period 1984-2005 and provide estimates for the overall magnitude and the distribution of inherited wealth. Our results indicate that the period under examination the annual flow of inheritance increased markedly, from £22 billion in 1984 to £56 billion in 2005. The main drivers behind this increase were the rise in house prices and to a lesser extent the increase in the proportion of inheritances which included housing assets. Our results, based on analysis of survey data, show that the distribution of inheritances is characterized by a very high degree of inequality (comparable by and large to that observed in personal wealth) and that this has increased over time. However, the inequality increasing effect from the greater inequality in the distribution of inheritance was counterbalanced by the increase in the percentage of the population who received an inheritance. Our results also show that inheritance is positively associated with socio-economic status and that the disparities between groups became slightly more pronounced over time (mainly across educational groups). However, our evidence also shows that inheritance for the majority of recipients is fairly small and that large inheritances are limited to a very small minority of the population.inheritance, wealth, intergenerational transfers, inequality

Exploring the effects of integrated benefit systems and active labour market policies: Evidence from Jobcentre Plus in the UK

In April 2002 Jobcentre Plus started to operate in the UK bringing together the service of the Benefits Agency and the Employment Service. Offering a fully integrated benefit claiming and work placement/job-seeking service for people of working age this new organisation aims to strengthen the link between welfare and work. Due to the magnitude of the associated organisational change, the national roll-out of the new organisation is being implemented gradually over a transitional period ending in 2006. During this transitional period some local offices are fully integrated while others functions remain split between pre-existing Benefits Agency and Employment Service offices. In this paper we examine how changes in the level of integration (measured as the percentage of offices within districts offering the integrated Jobcentre Plus service) within districts over time affected performance with respect to job entry, benefit service and customer service delivery. Our analysis suggests that Jobcentre Plus has a clear positive effect on job entry outcomes for all client groups, a negative effect on business delivery while it has neither a positive nor a negative effect on customer service outcomes.Jobcentre Plus, welfare-to-work, non-jobseekers, policy evaluation

Jobcentre Plus or Minus? Exploring the performance of Jobcentre Plus for non-jobseekers

Since April 2002 Jobcentre Plus has started to operate nationwide in the UK providing fully integrated benefit claiming and work placement/job-seeking activities for people of working age. This new organisation put an explicit work-focus in the delivery of the benefit system. Along with Jobseeker's Allowance (JSA) claimants who traditionally have been the focus of relevant work-focused policies, Jobcentre Plus targets a much wider group of clients including lone parents, disabled people and carers. Although the work-focus of the new organisation could be beneficial for clients who themselves have an explicit work orientation, its effect on clients for whom work is not a feasible option are far less clear. This paper explores whether the changes in the delivery of the benefit system introduced by Jobcentre Plus have been beneficial for claimants who are not jobseekers and assesses which aspects of the new organisation work well and which could be improved in order to address more effectively the needs of non-job-oriented clients.Jobcentre Plus, welfare-to-work, non-jobseekers, policy evaluation

The impact of inheritance on the distribution of wealth: evidence from Great Britain

Using the British Household Panel Survey, we investigate the role of inheritance in shaping the distribution of household wealth in Great Britain during 1995-2005 – a period characterised by a substantial increase in wealth and an equally important decrease in wealth inequality. Abstracting from behavioural effects, we find that inheritances received during this period accounted for 30 per cent of the increase in wealth of inheritors. Regression estimates of the effect of inheritance on wealth accumulation suggest that households spend 30 per cent of their inheritances on average, and that there is substantial heterogeneity in household responses. Households that accumulated more wealth saved a larger share of their inheritances, as did middle aged households and those with lower initial wealth. Although inheritances are highly unequal they had a small impact on overall wealth inequality. This mainly reflected the fact that their size relative to other sources of wealth was very small

distoutc and svydistoutc: help file to accompany Stata programmes for undertaking distributional analysis of categorical outcome variables

The programmes estimate and automatically save in the current directory two excel files distributional statistics for any categorical variable varname (e.g. employment status, poverty status etc) overall and for each of the groups identified by each variable included in the variable list varlist (typical variables that can be included in the variable list include gender, age group, socioeconomic status). Specifying the bygroup (groupvar) option performs the distributional analysis separately for each subgroup in groupvar. Both crosssectional and over time change analysis is undertaken by the programme. The cross-sectional analysis produces estimates of the proportion of the sample that falls in each category identified by the categorical variable varname for each of the group identified by the variable in the varlist and for each year included in the dataset, as well as differences in the relevant statistics between the different groups relative to the reference group for each variable in the varlist (along with their respective standard errors and p-values). The over-time analysis produces estimates of the change in the proportion of the population that falls in each category defined by the categorical variable for each year t relative to the previous year t-1 (along with the standard error and p-value of the changes). The over-time analysis also produces estimates (along with their standard errors and the corresponding p-values) of the across groups differences in the change in the proportion of the population that falls in each category defined by the categorical variable varname relative to the reference category for each of the subpopulations identified by the categories in each variable in the varlist. The programme also allows analysis to be undertaken by subpopulation groups allowing intersectional research. Both a non-survey design and survey design versions of the programme are available (distoutc and svdistouc respectively)

The scale and drivers of ethnic wealth gaps across the wealth distribution in the UK: evidence from Understanding Society

Using data from Understanding Society, this paper investigates for the first time the scale and the drivers of ethnic disparities in wealth across the net worth distribution (until recently assessed at the mean or the median). The analysis reveals that apart from people in the Indian ethnic group, all other ethnic minority groups have substantially less net worth than the White British group across the distribution and are less likely to hold high-return assets and more likely to hold financial debt. The picture in terms of housing wealth is similar: the Indian ethnic group comes out as the group with the higher housing wealth than any other ethnic group. By contrast, in terms of net financial wealth all ethnic minority groups including the Indian ethnic group have substantially less wealth (including very high levels of indebtedness) than the White British group. The wealth disadvantage of ethnic minority groups with lower net worth holdings relative to the White British group, is reduced but remains substantial across the distribution, even after accounting for differences in observable characteristics. The scale of the differences that is explained by observable characteristics varies across the distribution and across groups but their effect is generally stronger at below the median. Analysis by wealth component shows that observable characteristics explain a larger share of the ethnic gaps in financial wealth than the ethnic gaps in housing wealth. This is especially the case at below the median financial wealth levels where the financial wealth disadvantage of most ethnic groups, is fully explained by differences in observable characteristics. By contrast, differences in observable characteristics have a negligible effect in explaining the lower net housing wealth of ethnic minority groups with lower housing wealth across the housing wealth distribution, suggesting that ethnic minority groups face unobserved disadvantages, which translate into lower housing wealth. By contrast, differences in observable characteristics fully explain the housing wealth advantage of people in the Indian ethnic group

The impact of inheritance on the distribution of wealth: Evidence from the UK

In this paper we examine how the distribution of wealth has been changing in UK over the period 1995 to 2005 and how the sum of inheritance received between 1996-2004 contributed to the observed trends in wealth accumulation and wealth inequality. Using data from the British Household Panel Survey we find that the period 1995-2005 was a period of substantial growth in net worth and of a substantial decrease in wealth inequality recorded in the survey. The main driver behind both trends was the rise in house prices and the resulting increase in the housing equity of middle wealth-holders. Inheritances received between 1996 and 2004 contributed about 10 to 15 per cent (depending on the capitalisation assumption) of the average household wealth accumulation that occurred during 1995-2005 and somewhere between 26 and 30 per cent of the wealth accumulation of inheriting households (and possibly more if we could account for the rate of returns on early inheritance used by some to finance house purchase). Inheritances were highly unequal and had a positive (but rather small) correlation with pre-inherited wealth. This meant that inherited wealth accounted for part of the observed inequality of net worth in 2005. However, some significant inheritors started with low initial wealth (and this was true within each age group). Inheritance in the period therefore weakened the relationship between non-inherited wealth and the final total. The net effect was therefore that inheritances in the previous decade had a mild equalizing impact on 2005 net worth inequality. However given the small magnitude of these effects and the uncertainty about the behavioural responses to inheritances, inheritance can probably best be seen as maintaining wealth inequalities rather than either narrowing or widening them.inheritance, wealth, intergenerational transfers, inequality