Inheritance Shifting the Balance

The so-called Great Wealth Transfer is not a single event but a prolonged process unfolding over decades. Older generations are not only larger than before, but also substantially wealthier. As they pass on, this wealth will be transmitted to younger cohorts that are, demographically speaking, much smaller. Fertility has been low for decades, and this creates a structural imbalance: a large, asset-rich older population and a relatively small pool of heirs. Its effects will not be uniform, and its outcomes are not predetermined. My research, therefore, is not about how much wealth will be transferred, but to whom, in what form and with what consequences.

Millennials or Gen Z?

Will Millennials be the primary beneficiaries, or will a significant share of this wealth skip directly to Generation Z? Timing matters here. Increasing longevity delays inheritance, meaning that many Millennials may receive assets relatively late in life when key life transitions, such as home purchase or family formation, have already occurred. This raises the possibility that the transformative impact of inheritance may be uneven across cohorts, or even within them.

Wealth Composition

Equally important is the composition of wealth. In Italy, a large share of household wealth is tied up in real estate. But real estate is not homogeneous. Properties in major cities have appreciated dramatically over time, while those in other areas have stagnated or even declined in value. This geographical divergence introduces a new layer of inequality. Two individuals may inherit property of similar sentimental value, yet vastly different market worth. Liquidity also matters: a financial portfolio can be reallocated with relative ease, whereas real estate often anchors wealth in place, both economically and socially.

Behavior and the Amplification of Inequality

What heirs do with inherited wealth is another critical dimension. Some will consume it, using it to improve their standard of living or reduce financial stress. Others will invest it, potentially amplifying returns over time. These behavioral differences tend to correlate with prior wealth, education and financial literacy. As a result, inheritance may amplify existing inequalities.

Family structure further complicates the picture. In larger families, inheritances are typically divided among several siblings, which can dilute their individual impact. Since larger families are, on average, more common among lower-income groups, this dynamic can reinforce inequality across socio-economic strata.

The Role of Public Systems

Finally, there is the broader context. Public systems (pensions, healthcare, long-term care) are already under strain due to ageing populations. Private wealth transfers may partially offset these pressures for some individuals, but not for all. If access to inherited resources becomes a key determinant of wellbeing in old age, we risk deepening divides between those who can rely on family wealth and those who depend entirely on public provision.