This paper empirically compares the contribution of the two major wealth accumulation
factors - earned income and inheritances - to the net wealth position of households in the
Eurozone. The elasticities of both wealth sources differ considerably across countries and are
overly non-linear. Depending on the position in the wealth distribution, an increase of one percentile in the income distribution corresponds to 0.1-0.6 percentiles in the net wealth distribution. We find substantially stronger effects for inheritances vis-á-vis income. In Greece,
Portugal, and Austria, households have to climb around three percentiles in the income distribution
to compensate a one percentile increase in the inheritance distribution. The findings
clearly suggest that bequests play a stronger role in wealth accumulation than earned income.Series: INEQ Working Paper Serie
