Intended and Accidental Bequests in a Life-cycle Economy
AbstractThis paper studies quantitative importance of accidental versus intended bequests. Bequests are decomposed into accidental and intended components by comparing the implications of a standard life-cycle model under alternative assumptions about bequest motives. The main finding is that accidental bequests account for at least half, and perhaps for all of observed bequests. The paper then examines how assumptions about bequest motives affect the effects of income tax changes. In contrast to previous research, I find that bequest motives are not important for the analysis of capital income taxation. The effects of labor income taxes are reduced by altruistic bequests, but the role played by bequests is much weaker than suggested by previous models.
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Bibliographic InfoPaper provided by Department of Economics, W. P. Carey School of Business, Arizona State University in its series Working Papers with number 2133407.
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Find related papers by JEL classification:
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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- Francis, Johanna L., 2009.
"Wealth and the capitalist spirit,"
Journal of Macroeconomics,
Elsevier, vol. 31(3), pages 394-408, September.
- GÃ¼nther Fink & Silvia Redaelli, 2005. "Understanding Bequest Motives An Empirical Analysis of Intergenerational Transfers," DNB Working Papers 042, Netherlands Central Bank, Research Department.
- S. Nuray Akin & Oksana Leukhina, 2013. "Risk-Sharing Within Families: Evidence From the Health and Retirement Study," Working Papers 2013-09, University of Miami, Department of Economics.
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