Women are poised to inherit trillions in the coming decades. Will it give them more power, too?
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TODAY'S STARTING POINT
The largest wealth transfer in history is happening in slow motion.
About $124 trillion worth of earnings, property, and other financial assets will change hands in the US over the next 23 years, financial experts estimate, as older Americans die off. And as men bequeath money to their spouses and divvy up their wealth among their children, most of the beneficiaries will be women.
The so-called great wealth transfer seems poised to change the American economy's relationship with gender. 'Wealth and personal finance especially has for generations or centuries been squarely the domain of men,' said Josie Cox, a financial journalist who wrote '
Money, valuable on its own, can also buy status. Yet it remains uncertain whether greater wealth will also give women greater power in American society. Here's how the great wealth transfer will happen and what it may mean.
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Share the wealth
Understanding the great wealth transfer means getting a little morbid.
Here's how it will work: Through 2048, many of the remaining members of the baby boom generation (defined as Americans born between 1946 and 1964) will die. Women tend to live longer, so most men will leave their assets to female spouses.
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'Something like 95 percent of the spousal inheritance goes to women,' said Kay Hope, a research analyst at Bank of America who has
Shifting cultural mores also help explain women's outsized share of the proceeds. Parents today are more likely to divide their assets relatively evenly between their male and female children than in the past, when inheritances flowed primarily to sons, Hope said. That will mean another $47 trillion going to younger women.
An economy transformed?
Greater wealth for women is poised to reshape the US economy.
Some companies are already recognizing the shift, and Hope expects more to follow. That could mean more financial advisers catering to women, travel companies marketing overseas vacations to older single women, or a medical industry that focuses on osteoporosis and other conditions that disproportionately affect women into old age.
'Men today control about two thirds of global wealth,' Hope said. 'When those numbers are more 50-50, how hard is it to ignore?'
The great wealth transfer could, in turn, grow the economy as a whole. Gender gaps in wages and labor force participation have narrowed in the US. If greater wealth helps more women enter or stay in the workforce, it could add trillions in value. 'It's not about pushing anyone aside,' Hope said, but 'about growing the whole pie.'
Still, the shift may not be seamless. 'There is still a real cultural narrative that implies that the world of money and the world of investment is a world that is geared towards men,' said Cox, the financial journalist. Experiences in her own life have proven as much, from waiters bringing her husband the check to a financial adviser who refused to talk until her husband got on the phone. (According to some estimates, 70 percent of widows fire their financial advisers.)
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The transfer may also reinforce inequality because it won't benefit those whose spouses or parents have little or nothing to pass on. The wealthiest 1 percent of Americans hold
Does money equal power?
The transfer also may not radically reshape women's position in American society, at least not by itself.
Women's wealth grew during the 20th century as more entered the workforce, went to college, and held political office. Those advances are real. But Cox doubts that money alone will enable enough women to climb the corporate ladder to reach gender parity, for example, because women still feel more pressure than men to leave the workforce to raise children. Changing that, she argues, would take policies like universal childcare, which the US doesn't have.
Changes in gender relations can also invite backlash. Despite the broad benefits of women's economic participation, men often believe that gains by women mean losses for them. It happened after World War II, Cox said, when women who entered the workforce found themselves relegated back to homemaking when their husbands returned from overseas.
A similar backlash may be brewing today. Polls show that the share of boys who think women should have the same job opportunities as men
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Cox is hopeful that progress on gender equality will continue and that the great wealth transfer will be part of it. But it won't be enough, she said. 'I think this is more like a small step rather than a giant leap.'
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