Working Paper: NBER ID: w1303
Authors: B. Douglas Bernheim; Andrei Shleifer; Lawrence H. Summers
Abstract: Although recent research suggests that intergenerational transfers play an important role in aggregate capital accumulation, our understanding of bequest motives remains incomplete. We develop a simple model of"exchange-motivated" bequests, in which a testator influences the decisions ofhis beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequests on the beneficiaries' actions. The model generates falsifiable empirical predictions which are inconsistent with other theories of intergenerational transfers. We present econometric and other evidence which strongly suggests that bequests are often used as a means of payment for services rendered by beneficiaries.
Keywords: bequests; intergenerational transfers; capital accumulation
JEL Codes: D91; H24; J12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| testator actions (D14) | beneficiary behavior (D64) |
| expectation of receiving a bequest (D14) | services provided by beneficiaries (H55) |
| presence of multiple beneficiaries (D14) | effectiveness of bequests (D64) |
| bequests (D64) | attention and effort from beneficiaries (F35) |
| bequeathable wealth (D14) | services provided by beneficiaries (H55) |