The Correlation of Net and Gross Wealth across Generations: The Role of Parent Income and Child Age

We use Danish register data to examine intergenerational rank-rank correlations in net wealth and gross housing wealth by child age and parental income. Our results indicate that gross housing wealth correlations are more stable by child age than are net wealth correlations, which we argue is due to a downward bias in net wealth correlations from transitory debt. Intergenerational housing wealth correlations also are larger for lower-income families, while net wealth correlations do not vary much across the income distribution. Finally, we show that intergenerational net wealth and gross housing wealth correlations move in opposite directions across the income distribution.