Template-Type: ReDIF-Paper 1.0
Author-Name: Tuuli Paukkeri
Author-Name-First: Tuuli
Author-Name-Last: Paukkeri
Author-Email: tuuli.paukkeri@vatt.fi
Author-Workplace-Name: VATT Institute for Economic Research
Author-Name: Terhi Ravaska
Author-Name-First: Terhi
Author-Name-Last: Ravaska
Author-Email: terhi.ravaska@tuni.fi
Author-Workplace-Name: Tampere University
Title: Income Inequality Early in Life: Underage Children as Owners of Privately Held Firms
Abstract: We present new evidence that privately held firms are used to transfer income to underage
children. This exacerbates wealth and income inequality among children and persists at least
into early adulthood. Underage children at the top 1% of the parental income distribution
are 20 times more likely to be owners of a privately held firm compared to children in the
bottom 90%. The average age of these underage firm owners is 12 years, with ownership
occurring across all ages from 0 to 17. Tracking data across generations shows that nearly
half of these underage children come from non-entrepreneurial family backgrounds.
Length: 25
Creation-Date: 2025-08
Publication-Status: Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research
File-URL: https://verotutkimus.fi/verotutkimus/wp-content/uploads/2025/08/FIT-WP-35-Income-Inequality-Early-in-Life-1.pdf
File-Format: Application/pdf
File-Function: First version, August 2025
Number:35
Classification-JEL: D3, H2, H3, M1
Keywords: privately held firms, income inequality, income mobility, family business, dynastic wealth
Handle: RePEc:fit:wpaper:35