Économie et Statistique n° 472-473 - 2014Wealth and savings behaviour - The input of the 2010 Wealth survey: savings behaviour, inequalities, retirement and lifecycle, behaviour when faced with risk
Wealth inequalities between generations: how do donations help the young generation?
In France, the wealth gap is widening between the oldest and youngest members of the population and moreover the youngest inherit increasingly late. Various fiscal measures have sought to rectify this imbalance. In 2007, for example, the exemption on transmissions to children was multiplied threefold and raised to 150,000 Euros. It has since been brought back to 100,000 Euros. Several studies show that parents are receptive to the tax breaks granted to donations. The impact of such transfers is, however, open to question. How are donations, and especially early donations, actually used? This article recalls the increasing importance of transmissions in France and the wealth inequalities between generations. The data from the INSEE 2010 Wealth survey then make it possible to study the impact of the different forms of transmission (inter vivos or after death) on two key behaviour patterns of the young generations: purchase of the main residence and start-up of a business. We show that the probability of starting up or taking over a business is greater when a donation has been received but is not with an inheritance. The probability of purchasing a home increases with both forms of transfer. We put forward several measurements of the intensity of the link between transmissions and investments. The link is all the stronger when the beneficiary of the transfer is young. It would appear that the increase in the prices of real estate in the first decade of the century went hand in hand with a strengthening of the link between a donation and the purchase of a home. Finally, we address the issue of the causal effect of a donation. Does it reinforce the decision to buy the home or is it a support for a decision already made? We use the fact that the probability of receiving a donation decreases with the number of brothers and sisters to show that the causal effect of a donation is greater than the effects previously evidenced.