The Nativity Wealth Gap in Europe: a Matching Approach

This paper uses a matching method to provide a first estimate of the nativity wealth gap among older households in Europe. This approach does not require to impose any functional form on wealth and avoids validity-out-of-the-support assumptions; furthermore, it allows not only the estimation of the mean of the wealth gap but also its distribution for the common-support sub-population. The results show that on average there is a positive and significant wealth gap between natives and migrants. However, the average gap may be misleading as the distribution of the gap reveals that immigrant households in the upper part of the wealth distribution are better off, and those in the lower part of the wealth distribution are worse off, than comparable native households. Although intra-European migrant households are better off than non-European ones, a heterogeneity analysis reveals that the former have also suffered most from migrating in terms of wealth, as their wealth gap is sizable and cannot be explained by observable characteristics. The same is true for households who migrated as adults, as opposed to those who migrated at younger ages.