Wealth Disparities by Household Type in Europe

Ginevra Floridi , University of Edinburgh
Elisenda Rentería, Centre for Demographic Studies

Wealth inequality is rising across Europe in line with increasing housing prices and unequal intergenerational transfers and inheritances. Households are the main units of analysis for the study of wealth inequalities. Still, little research has investigated how wealth portfolios differ across household types, with the exception of comparisons between single- and dual-parent households. Changing household structures in Europe, including the increase in single-person, single-parent, and extended family households, make it timely to understand wealth disparities across the entire range of household configurations. We analyse Household Finance and Consumption Survey data from 2021 on around 40,000 households across 10 European countries to compare the distribution of wealth across five household types: single-person, couple-only, couple with young children, single parent with young children, and extended family. After showing the raw differences in wealth distributions and medians, we use propensity score reweighting and RIF regressions to adjust for differences in compositional characteristics, including age, gender, and migrant status of the main earner, household income, and the receipt of large gifts and inheritances. We find wide wealth gaps by household types that differ between older and younger generations. Single-parent, extended, and single-person households have substantially lower wealth than couple households. While compositional differences partly explain the disadvantage of single-parent households and the advantage of couple-only households, extended families’ low wealth and the high wealth of couples with children are not explained by observed characteristics, suggesting the selection of the already-wealthy into “nuclear family” arrangements, and the potential role of government benefits and taxation.

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 Presented in Session 96. Intergenerational Relations, Financial Support and Inequalities