Prosperity by inheritance: why the middle class in Europe is so stable

Ivan Zubov

Many Western analysts argue that the middle class in developed countries is about to begin to "shrink", but sociological studies say otherwise. What is the reason?

The Russian Futurist channel publishes a link to the work of experts from the European Center for Political and Economic Research (CEPR), who, using the example of Denmark, found out that the middle class is determined not only by current income, but also by accumulated human capital.

For example, the children of the "old" middle class are better educated and healthier than their parents (let alone their grandparents). Among them, there are fewer people with deviant behavior (this is also evidenced by the decrease in the level of crime within this stratum, as well as teenage pregnancies). There is less unemployment among young people than a generation ago. The current generation has better and cheaper access to credit than their parents.

Moreover, these seemingly intangible indicators for the quality of life are more significant than current income. The researchers write:

“If we focus on resources measured by wage income or disposable income at age 30–35 in both the parent and child generations, the estimates are about 0.3 (i.e., a 10 percent increase in parental income is due to with a 3% increase in the child's income). If we focus on the resources throughout life that a person can count on, the estimate is already about 0.5.

Finally, current generations receive more inheritance than their parents or, moreover, grandparents. For example, even with inheritance tax, they need to spend less on buying a new home.

All this shows the very great power of material and non-material wealth accumulated by previous generations of the middle class.

In this regard, it should be noted that the Russian middle class, having not had time to properly form in 30 years, has a great chance of disappearing soon: over the past decade it has been steadily declining, while in the West, contrary to forecasts, not only does not disappear, but even growing.

For example. There are family hotels in Japan that are over 1000 years old! It's not uncommon in Italy to walk into a cafe that has been owned by the same family for centuries...