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Intergenerational Transfers and the Accumulation of Wealth

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Author Info
Gale, William G
Scholz, John Karl

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Abstract

This paper uses household data to provide direct estimates of intergenerational transfers as a source of wealth. The authors distinguish between intended transfers (for example, gifts to other households) and possibly unintended transfers (bequests) and estimate that intended transfers account for at least 20 percent of net worth. Thus, a significant portion of the U.S. wealth cannot be explained by the life-cycle model, even when the model is augmented to allow for bequests. Estimated bequests can account for an additional 31 percent of net worth. The authors also show that transfers among living people are about half as large as bequests. Copyright 1994 by American Economic Association.

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Publisher Info
Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 8 (1994)
Issue (Month): 4 (Fall)
Pages: 145-60
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Handle: RePEc:aea:jecper:v:8:y:1994:i:4:p:145-60

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Laurence J. Kotlikoff & Avia Spivak, 1979. "The Family as an Incomplete Annuities Market," NBER Working Papers 0362, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Abel, Andrew B, 1985. "Precautionary Saving and Accidental Bequests," American Economic Review, American Economic Association, vol. 75(4), pages 777-91, September. [Downloadable!] (restricted)
  3. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1985. "The Strategic Bequest Motive," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1045-76, December. [Downloadable!] (restricted)
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  4. Hurd, Michael D, 1989. "Mortality Risk and Bequests," Econometrica, Econometric Society, vol. 57(4), pages 779-813, July. [Downloadable!] (restricted)
  5. Laurence J. Kotlikoff & Lawrence H. Summers, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," NBER Working Papers 0445, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Davies, James B, 1981. "Uncertain Lifetime, Consumption, and Dissaving in Retirement," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 561-77, June. [Downloadable!] (restricted)
  7. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June. [Downloadable!] (restricted)
  8. Bernheim, B Douglas, 1991. "How Strong Are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 899-927, October. [Downloadable!] (restricted)
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  9. White, Betsy Buttrill, 1978. "Empirical Tests of the Life Cycle Hypothesis," American Economic Review, American Economic Association, vol. 68(4), pages 547-60, September. [Downloadable!] (restricted)
  10. Michael D. Hurd & B. Gabriela Mundaca, 1987. "The Importance of Gifts and Inheritances Among the Affluent," NBER Working Papers 2415, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Menchik, Paul L & David, Martin, 1983. "Income Distribution, Lifetime Savings, and Bequests," American Economic Review, American Economic Association, vol. 73(4), pages 672-90, September. [Downloadable!] (restricted)
  12. Modigliani, Franco, 1988. "The Role of Intergenerational Transfers and Life Cycle Saving in the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 15-40, Spring. [Downloadable!] (restricted)
  13. Hurd, Michael D, 1987. "Savings of the Elderly and Desired Bequests," American Economic Review, American Economic Association, vol. 77(3), pages 298-312, June.
  14. Davies, James B, 1982. "The Relative Impact of Inheritance and Other Factors on Economic Inequality," The Quarterly Journal of Economics, MIT Press, vol. 97(3), pages 471-98, August. [Downloadable!] (restricted)
  15. Michael R. Darby, 1978. "The Effects of Social Security on Income and the Capital Stock," UCLA Economics Working Papers 095, UCLA Department of Economics. [Downloadable!]
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  16. Menchik, Paul L, 1980. "Primogeniture, Equal Sharing, and the U. S. Distribution of Wealth," The Quarterly Journal of Economics, MIT Press, vol. 94(2), pages 299-316, March. [Downloadable!] (restricted)
  17. Laurence J. Kotlikoff & Lawrence H. Summers, 1988. "The Contribution of Intergenerational Transfers to Total Wealth: A Reply," NBER Working Papers 1827, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. Kurz, Mordecai, 1984. "Capital Accumulation and the Characteristics of Private Inter-Generational Transfers," Economica, London School of Economics and Political Science, vol. 51(201), pages 1-22, February. [Downloadable!] (restricted)
  19. Lord, William & Rangazas, Peter, 1991. "Savings and Wealth in Models with Altruistic Bequests," American Economic Review, American Economic Association, vol. 81(1), pages 289-96, March. [Downloadable!] (restricted)
  20. Cox, Donald, 1990. "Intergenerational Transfers and Liquidity Constraints," The Quarterly Journal of Economics, MIT Press, vol. 105(1), pages 187-217, February. [Downloadable!] (restricted)
  21. Kessler, Denis & Masson, Andre, 1989. "Bequest and Wealth Accumulation: Are Some Pieces of the Puzzle Missing?," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 141-52, Summer. [Downloadable!] (restricted)
  22. B. Douglas Bernheim, 1987. "Does the Estate Tax Raise Revenue?," NBER Working Papers 2087, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  23. Kotlikoff, Laurence J, 1988. "Intergenerational Transfers and Savings," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 41-58, Spring. [Downloadable!] (restricted)
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  24. Auerbach, A.J. & Kotlikoff, L.J. & Weil, D.N., 1992. "The Increasing Annuitization of the Elderly - Estimates and Implications for Intergenerational Transfers, Inequality and National Saving," Papers 6, Boston University - Department of Economics.
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  25. Tomes, Nigel, 1981. "The Family, Inheritance, and the Intergenerational Transmission of Inequality," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 928-58, October. [Downloadable!] (restricted)
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