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Life-Cycle and Altruistic Theories of Saving with Lifetime Uncertainty

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Author Info
Kuehlwein, Michael
Abstract

This paper examines testable implications of the life-cycle theory of saving with lifetime uncertainty. Theory sugges ts that persons facing lower mortality rates should exhibit greater consumption growth. Nonparametric tests, using the Retirement Histor y Survey, provide mixed support for the theory. A parameterized model allowing for altruism provides more support. Estimates of a bequest parameter indicate that elderly households value contributions to bequests as highly as contributions to their own consumption. This i s equally true for households with and without children. Such a beques t motive would curtail the impact of lifetime uncertainty on consumpti on growth. Copyright 1993 by MIT Press.

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Publisher Info
Article provided by MIT Press in its journal Review of Economics & Statistics.

Volume (Year): 75 (1993)
Issue (Month): 1 (February)
Pages: 38-47
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Handle: RePEc:tpr:restat:v:75:y:1993:i:1:p:38-47

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  1. Andrew Mason & Tomoko Kinugasa, 2005. "Why Nations Become Wealthy: The Effects of Adult Longevity on Saving," Working Papers 200514, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
  2. Wojciech Kopczuk & Joseph Lupton, 2005. "To Leave or Not To Leave: The Distribution of Bequest Motives," NBER Working Papers 11767, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Michael Perry, 2006. "On the Covariance Structure of Changes in Consumption in the Health and Retirement Study," Working Papers wp112, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  4. Esteban A. Nicolini, 2001. "Adult Mortality And Investment: A New Explanation Of The English Agricultural Productivity In The 18th Century," Working Papers in Economic History wh016301, Universidad Carlos III, Departamento de Historia Económica e Instituciones. [Downloadable!]
  5. Michael Perry, 2005. "Estimating Life Cycle Effects of Survival Probabilities in the Health and Retirement Study," Working Papers wp103, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  6. Lopez, Fernando Lera, 1999. "Recent decline in family savings rate: possible Explanations," ERSA conference papers ersa99pa098, European Regional Science Association. [Downloadable!]
  7. Rebelein, Robert P., 2005. "Intergenerational Strategic Behavior and Crowding Out in a General Equilibrium Model," Vassar College Department of Economics Working Paper Series 74, Vassar College Department of Economics. [Downloadable!]
  8. Sandra Freire, 2004. "Funeral Costs, Saving Behaviour and HIV/AIDS," Cahiers de la Maison des Sciences Economiques bla04092, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
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