Why Generational Wealth Gaps Are Now Larger Than Income Gaps
August 6, 2025 · Frisian News
Property ownership and inherited assets now divide young and old workers far more than wages do. This shift reflects decades of asset inflation that wage earners alone cannot match.
A 35-year-old office worker in Amsterdam earns somewhat more than a colleague did at the same age thirty years ago. Yet that worker owns a fraction of the property wealth. The gap between what young people can buy and what their parents bought at the same life stage has grown so wide that income differences now pale beside it. Research from the Dutch central bank shows wealth gaps between age groups have grown substantially while wage gaps between rich and poor workers have barely moved.
Property prices drove this wedge. Since 1995, Dutch housing costs rose much faster than wages. Housing that was affordable on a standard salary a generation ago now requires far more income to finance. A young couple faces a steep mortgage for a modest apartment. Their parents borrowed far less for a larger house on similar combined income. The math simply does not work for anyone without family money behind them.
Inheritance amplifies the effect. Children of homeowners inherit not just property but the accumulated gains from four decades of appreciation. A 35-year-old who receives a large inheritance can buy outright what a peer without family wealth must finance over many years. This transfers generational advantage into concrete assets. Institutional investors and foreign capital also bid up property prices, making it harder for locals to compete. The market does not care about fairness, only what buyers will pay.
Wages grew, but wealth grew faster. A plumber in 1995 earned less in absolute euros than today, yet could save and build equity more easily. Today's workers earn more nominal income but face a mountain of debt before they own anything. Some economists call this prosperity. Workers know better. The gap between stable employment and owning a home has become so large that many under 40 simply give up trying.
Policymakers have few answers. Building more housing takes years and faces local resistance everywhere. Taxing wealth hard enough to matter requires political will no government seems to have. Some countries tried rent control, which can limit available supply. Others tried stamp duty on foreign buyers, which moves money around but does not create homes. The wealth divide will keep growing until someone stops treating housing like an investment portfolio and starts treating it like shelter.
Published August 6, 2025 · Frisian News