Are Rich Women Doing Less Well in the US Than in the UK?

It’s hard to reach any firm conclusions from the data cited in this New Economist post, “Women and Wealth,” which compares estate data from the US and the UK to see how very wealthy women are faring, becaues the populations are so different (millionaires in the UK, which is roughly the highest 5%, versus the top .01% in the US, a very rarified bunch). However, not only do US women at the top appear to be doing less well than their peers across the Atlantic, but they are also faring worse over time:

How many of the really rich are women? Two recent reports suggest divergent trends for wealthy women across the Atlantic. In the United States, a new NBER working paper by Lena Edlund and Wojciech Kopczuk, Women, Wealth and Mobility, concludes:

Using estate tax returns data, we observe that the share of women among the very wealthy (top 0.01%) in the United States peaked in the late 1960s, reaching almost 50%. Three decades on, women’s share had declined to one third, a return to pre-war levels.

But not so in the UK. According to a new report by Barclays Wealth, female millionaires are set to outnumber male millionaires in the UK – though not quite yet. The Scotsman reports:

Female millionaires are set to outnumber their male counterparts in the UK for the first time, a new report claims. …Women will account for 35 per cent of UK millionaires by 2010 and 53 per cent by 2020, the report found. …The combined wealth of Britain’s richest women in 2007 is now £33.27 billion.

A separate report by the Centre for Economic and Business Research found that women currently hold 48 per cent of Britain’s personal wealth and that this proportion will grow steadily to 60 per cent by 2025 as women continue to outnumber men at universities and excel in business and as entrepreneurs.

In a statement, Barclays Wealth said: “The affluence and influence of women is growing and is increasingly fuelled by their own individual enterprises – highlighting that the perception of inheritance and marriage as the lead sources of female wealth is outdated.”

Prenups? Postnups? Perhaps, but I suspect the change in the US stats is due largely to the fact that divorce is more common, and men at the top remarry substantially younger women. When these women are widowed, in their mid-30s to mid-50s, they still have a long life expectancy ahead of them. Wealthy widows are expected to give heavily to charity. 20 to 50 years of giving could easily take an inheritance out of the top .01% without impairing the donor’s lifestyle.

By contrast (British readers please correct me if I have this wrong, but I recall reading something to this effect in the Financial Times), divorce at the top is far more time consuming and costly in the UK than in the US, so there is a greater propensity for very rich men to have mistresses than divorce and remarry. And someone who is merely a millionaire is not likely to give enough away to take them below that level.

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