It's getting harder than ever to become a self-made billionaire. But inheritances are still going strong.

• Billionaires minted through inheritance outpaced self-made billionaires last year for the first time in a decade.
• Experts cite deteriorating conditions for building wealth through entrepreneurship.
• The divergence between the growth of inherited wealth and the reduction of organic opportunities for the middle class is likely to keep accelerating, economists say.

Economists say the path to self-made riches in the US is shrinking, and there are more riches being passed down through inheritance these days than are being created through entrepreneurship. 

The world's billionaires accumulated more wealth through inheritance than entrepreneurship in 2023, according to a report from UBS last November. It was the first year that the bank found that to be the case in nine years of research. 

Not all who became mega-rich by way of inheritance are nepo babies (those who have gained success in their careers due to the fame and wealth of their parents). Many of them though, will likely take on family businesses, scale them, or use their resources to pivot to another venture, says Max Kunkel, the chief investment officer of UBS's global wealth management division.

All are almost certain to have a significant leg up over people who are less wealthy. That runs parallel to what economists say after the most difficult conditions in a century for middle class workers trying to build wealth.

That's most clearly seen in the paychecks among people in the middle class, where more children are now growing up to earn less than their parents. 90% of children born in 1940 went on to earn more than their parents, but that rate dropped to just 50% in the 80s, according to data from Harvard University's Opportunity Insights.

In recent years, rates of economic opportunity have begun to fall again. The number of children who go on to make more than their parents has dropped to the lowest level since the early 1900s, according to Opportunity Insights research scientist Matthew Staiger.

"The chance of rising up and doing better than your parents went from basically [certain] for kids born in the mid-century to a coin flip in the 1980s," Staiger told Business Insider.

However, the wealthiest portion of the population is seeing the exact opposite trend. A paper from Opportunity Insights — citing data from the Economic Policy Institute — found that in 2021 salaries for the top 0.1% of earners grew at the fastest pace of any income group. Meanwhile, the bottom 90% saw their wages decline.

Higher interest rates and other macroeconomic headwinds also mean that conditions for entrepreneurial wealth-building have also deteriorated, according to Kunkel. He says that's why there are fewer self-made billionaires today than there were in the past. The world minted just 150 billionaires in 2023, according to Forbes' billionaires list, down from the 236 billionaires that were created in 2022.

The trends of deepening inequality and narrowing opportunity could accelerate further. Kunkel expects interest rates to stay higher-for-longer, meaning wealth-building conditions for entrepreneurs could be dire for some time. 

Meanwhile, the ranks of billionaire heirs and heiresses will keep growing. Kunkel thinks the "Great Wealth Transfer" will stretch on over the next 20 to 30 years, with about 1,000 billionaire boomers expected to pass along $5.2 trillion to their successors. 

"This is just the first part where you can really see that it's starting to gain momentum," he told Business Insider. 

Staiger also sees challenges in equaling out the playing field for self-made fortune seekers. Though things like unions can help boost wages for lower- and middle-income groups, economic mobility has been on the decline for most of the last 83 years — meaning there's a lot of catching up to do.

"I think there's much work to be done to try to restore rates of economic opportunity to those observed several decades ago," he said.