Working Paper: NBER ID: w9142
Authors: Michael D. Hurd; James P. Smith
Abstract: Based on a sample of actual bequests that is population-representative and on the subjective probability of bequests, we estimate the distribution of bequests that the older population will make. We find that the distribution is highly skewed, so that the typical baby-boom person will receive a very modest inheritance. This is partly due to the skewed distribution of wealth and partly due to the tendency of the wealthy to have fewer children. But it is also due to anticipated dissaving: we estimate that households in the age band 70-74 will bequeath just 39% of their wealth, consuming the rest before they die.
Keywords: bequests; wealth distribution; aging population; inheritance
JEL Codes: J14; E21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| wealth distribution (D31) | anticipated bequests (D14) |
| wealth distribution (D31) | actual bequests (D64) |
| family size (J12) | actual bequests (D64) |
| wealth changes (D31) | anticipated bequests (D14) |
| age (J14) | anticipated bequests (D14) |
| wealth distribution (D31) | skewed distribution of bequests (D14) |
| anticipated dissaving (E21) | actual bequests (D64) |