Can "Rich Getting Richer" Be Linked to Birth Rate? ?

Question

We are continually hearing that the diverging concentrations of wealth in this country. It seems fairly logical that the number of people who control most of the wealth is related primarily to the declining birth rate that began during the baby boomer era (obviously, kids per family). A person dying with 1.5 million and 5 kids left an inheritance of $250k per kid, versus with 2 kids an inheritance of $750k per kid. Combine that and our generous immigration policies and I think you would find 90% of the reason for the divergence.

Of course, this is pretty logical explanation will convince no one who insists there is something more sinister at work, but oh well.

Answer 1

There can be a certain element of demography. Household wealth is positively correlated with age up until about age 70, so if a population is aging, you would expect to see more concentration. I think you will find that inheritance has little to do with it.

The bigger factor is simply that demand for people with really high levels of skill is increasing more rapidly than the supply of same and much more rapidly than demand for skills that are more evenly distributed in the population.