The New Path to Wealth: Why Inheritance Now Trumps Hard Work

For generations, the conventional wisdom has been that hard work, innovation, and career success pave the path to wealth. But in 2025, economic realities suggest a different truth: inheritance is emerging as the defining factor in financial prosperity. Just as in Jane Austen’s time, when marriage to a wealthy heir was the most reliable way to secure a fortune, today’s rich countries are experiencing a resurgence of inherited wealth that is transforming economies and societies.

The Return of Inheritance

While government statistics rarely track inheritance flows—one-time wealth transfers are difficult to capture in surveys—academic estimates paint a clear picture. In 1900, inheritances accounted for over 20% of GDP in some wealthy nations, driven by vast estates and stock portfolios. That figure declined over the 20th century due to wars, inflation, and high taxation, but has since rebounded. By the end of the 2010s, inheritances represented roughly 10% of GDP across advanced economies. In 2025, individuals in the developed world are set to inherit a staggering $6 trillion.

The share of national wealth derived from inheritance is rising sharply. In 2023, UBS reported that 53 new billionaires emerged through inheritance—just shy of the 84 who amassed their wealth through work. In France, the annual inheritance flow has doubled since the 1960s, while Germany’s has nearly tripled since the 1970s. In Britain, inheritances have become twice as significant, relative to earnings, for those born in the 1980s compared to the prior generation. Italy leads the trend, where inheritances now exceed 15% of GDP, reinforcing an economic structure reminiscent of aristocratic Europe. Only Ireland stands apart, with relatively modest and stable inheritance levels.

In the United States, for every $100 paid in wages annually, $20 is inherited—illustrating how passive wealth accumulation is rivaling earned income. Furthermore, falling birth rates mean that each inheritance is divided among fewer heirs. In Britain, declining family sizes have increased the average inheritance per recipient by £60,000 ($75,000), or 24%, in recent decades. Siblings, it seems, come at a financial cost.

Tax Breaks for the Wealthy

Declining inheritance taxes amplify the impact. In the early 20th century, estate duties formed a significant part of government revenue in Britain and America. But as globalization increased, policymakers feared wealth flight and slashed these levies. Today, inheritance taxes contribute less than 1% of total tax revenues across rich nations. Several countries—including Australia, Canada, India, Norway, and Russia—have abolished them entirely. In the U.S., more than 20 states repealed their wealth-transfer taxes between 1976 and 2000, and calls to eliminate federal estate taxes persist.

A Cultural Shift Toward Dynastic Wealth

The cultural prominence of inheritance is reflected in popular media. HBO’s Succession revolves around siblings vying for control of their father’s media empire. Crazy Rich Asians explores the trials of marrying into a dynasty. Novels such as Cynthia D’Aprix Sweeney’s The Nest and John Lanchester’s Capital depict the tensions of inheriting vast fortunes. As one character in Capital muses upon receiving a London home: “The equation was too plain and too depressing. In the debit column, she had lost her mother; in the credit column, she now had a gigantic pile of cash.”

The Driving Forces Behind Inheritance’s Rise

Three key factors explain this resurgence: increasing wealth, demographic shifts, and slower economic growth.

1. The Growth of Wealth After World War II, many European fortunes were eroded by war damage, inflation, and high taxes. But the latter half of the 20th century reversed this trend. Housing prices soared due to restrictive planning policies. In Britain, real estate values climbed from £1 trillion (130% of GDP) in the mid-1990s to nearly £7 trillion (270% of GDP) today. Meanwhile, stock markets performed exceptionally well, and inflation remained low until recently. Wealth managers and index funds have also helped the rich preserve their fortunes, preventing the fate of once-wealthy families like the Vanderbilts.

2. Demographics Favor the Boomers Baby boomers amassed wealth at the right time, benefiting from booming stock and housing markets. In Germany, those over 65—who constitute 20% of the population—control one-third of the country’s wealth. In the U.S., baby boomers hold half of the nation’s net wealth, amounting to $82 trillion. As this generation ages, their wealth is beginning to transfer to their heirs at an unprecedented rate.

3. Slower Economic Growth Favors Wealth Over Work In 2014, economists Thomas Piketty and Gabriel Zucman demonstrated that slower-growing economies accumulate more wealth relative to national income. In nations with sluggish GDP growth—such as Germany and Italy—inheritance plays a greater role in wealth distribution than in faster-growing economies like the U.S. and Ireland. Ironically, the inheritance boom may further suppress growth, as more people prioritize wealth preservation over entrepreneurship and risk-taking.

Social and Economic Consequences

The rise of inheritance exacerbates economic inequality. Data from the Federal Reserve indicate that the average American in the top 5% of earners has inherited over $50,000, compared to just $5,000 for someone in the middle. Research by Hero Ashman and Seth Neumuller attributes a quarter of the racial wealth gap in the U.S. to intergenerational transfers.

Housing markets are also affected. In the U.S., Legal & General estimates that if the “Bank of Mom and Dad” were an actual mortgage lender, it would rank among the top ten in the country. Inherited wealth significantly boosts homeownership rates among young people—by as much as a third—while those without affluent parents struggle to buy property.

The Marriage Market and the Future of Wealth

The inheritance boom is even reshaping marriage patterns. Economic theory describes “assortative mating,” where people partner with those of similar education or income. Recent research suggests that heirs are also more likely to marry each other. In Germany, inheritance is two-and-a-half times more influential than income in determining marriage choices. A study on Denmark finds that the role of inheritance in spouse selection is only increasing.

Take two high-earning Londoners: “Inheriting Isabel” and “Nonbeneficiary Nancy.” Both earn £100,000 ($126,000) annually—putting them in the top 10% of earners. Both aspire to own a 90th-percentile home, priced at £1.2 million. Isabel’s parents gift her the property outright. Nancy, despite saving half her post-tax salary, may never fully pay off a mortgage of that size. If marriage is a financial decision, the choice is obvious.

This pattern will persist for years. Baby-boomer deaths will peak in 2036, when 1.5 million will pass away in the U.S. alone, further accelerating wealth transfers. Rising property and stock values will only amplify the trend. With governments reluctant to reintroduce inheritance taxes, an entrenched inheritor class—more enduring than the landed gentry of Austen’s era—is on the horizon.

For the fortunate few, it will be a fine thing indeed.