Understanding Bequest Motives: An Empirical Analysis of Intergenerational Transfers

TitleUnderstanding Bequest Motives: An Empirical Analysis of Intergenerational Transfers
Publication TypeReport
Year of Publication2005
AuthorsFink, G, Redaelli, S
InstitutionAmsterdam, De Nederlandsche Bank
Call Numberwp_2005/Fink-Redaelli.pdf
KeywordsAdult children, Consumption and Savings
Abstract

This paper analyzes one of the major factors underlying old agents saving and consumption decisions - the individual intentions to leave bequests. We present two simple model of altruistically motivated bequests and use data from the Health and Retirement Study (HRS) to confront the theoretical implications of the two model with empirical evidence from the survey data provided. The main findings from the data are the following: First, there is strong evidence against a strictly accidental, and in favor of intentional bequest motive for a significant share of agents aged sixty and older. Second, we find the probability to leave an inheritance is mainly driven by wealth and individual characteristics such as health, education, race and religion, but not directly dependent on the heirs wellbeing, contradicting the standard altruistic model of bequest.

Endnote Keywords

Bequest Motives/Saving/Consumption

Endnote ID

15080

Citation Key5625