Working Paper: CEPR ID: DP7701
Authors: Tullio Jappelli; Mario Padula; Giovanni Pica
Abstract: We estimate the effect of estate taxation on bequests exploiting a sequence of Italian reforms that culminated with the reduction of estate taxes in 1999 and their abolishment in 2001. To perform our exercise, we use the 1993-2006 Survey of Household Income and Wealth, which has data on real estate transfers and information on potential donors as well as recipients. Our sample includes data on 34,885 owners of real estate wealth and 120,686 potential donors. Differences-in-differences estimates indicate that the abolition of estate taxes has increased the propensity to transfer real estate wealth by about 2 percentage points, and square meter transferred by about 4 points.
Keywords: bequests; estate and inheritance taxes; intergenerational mobility
JEL Codes: E21; H24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Tax avoidance behaviors and unobservable preference traits (H26) | Confounding of the relationship between estate taxes and intergenerational transfers (H24) |
| Abolition of estate taxes (H24) | Increase in propensity to transfer real estate wealth (K25) |
| Abolition of estate taxes (H24) | Increase in average square meters transferred (F16) |