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Anticipated and Actual Bequests

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Author Info
Michael D. Hurd
James P. Smith

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Abstract

This paper uses data on anticipated bequests from two waves of the Health and Retirement Study and the Asset and Health Dynamics of the Oldest Old (AHEAD), and on actual bequests from AHEAD. Actual bequests were measured in exit interviews given by proxy respondents for 774 AHEAD respondents who died between waves 1 and 2. Because the exit interview is representative of the elderly population, the distribution of estate values is quite different from that obtained from estate records, which represent just a wealthy subset of the population. Anticipated bequests were measured by the subjective probability of leaving bequests. Between waves 1 and 2, increases in bequest probabilities were associated with increases in the subjective probability of surviving, increments in household wealth, and widowing while out-of-pocket medical expenses reduced the likelihood of a bequest. By comparing bequest probabilities with baseline wealth we were able to test a main prediction of the life-cycle model, that individuals will dissave at advanced old-age. The AHEAD respondents anticipate substantial dissaving before they die.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7380.

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Date of creation: Oct 1999
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Handle: RePEc:nbr:nberwo:7380

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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. Michael Hurd, 1993. "The effect of changes in Social Security on bequests," Journal of Economics, Springer, vol. 7(1), pages 157-176, December. [Downloadable!] (restricted)
  2. Michael D. Hurd, 1999. "Mortality Risk and Consumption by Couples," NBER Working Papers 7048, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Hurd, Michael D, 1989. "Mortality Risk and Bequests," Econometrica, Econometric Society, vol. 57(4), pages 779-813, July. [Downloadable!] (restricted)
  4. David, Martin & Menchik, Paul L, 1985. "The Effect of Social Security on Lifetime Wealth Accumulation and Bequests," Economica, London School of Economics and Political Science, vol. 52(208), pages 421-34, November. [Downloadable!] (restricted)
  5. Casey B. Mulligan, . "Economic and Biological Approaches to Inheritance: Some Evidence 1996," University of Chicago - Population Research Center 95-14, Chicago - Population Research Center.
  6. Hurd, Michael D, 1987. "Savings of the Elderly and Desired Bequests," American Economic Review, American Economic Association, vol. 77(3), pages 298-312, June.
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  1. Michael Hurd & James P. Smith, 2003. "Expected Bequests and Their Distribution," Working Papers 03-10, RAND Corporation Publications Department. [Downloadable!]
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  2. Michael Hurd, 2003. "Are Bequests Accidental or Desired?," Working Papers 03-13, RAND Corporation Publications Department. [Downloadable!]
  3. Joseph G. Altonji & Ernesto Villanueva, 2003. "The Marginal Propensity to Spend on Adult Children," NBER Working Papers 9811, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Oliver Hart & John Moore, 1999. "On the Design of Hierarchies: Coordination Versus Specialization," NBER Working Papers 7388, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Ivica Dus & Raimond Maurer & Olivia S. Mitchell, 2003. "Betting on Death and Capital Markets in Retirement: A Shortfall Risk Analysis of Life Annuities versus Phased Withdrawal Plans," Working Papers wp063, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  6. Wolfram J. Horneff & Raimond Maurer & Olivia S. Mitchell & Ivica Dus, 2006. "Optimizing the Retirement Portfolio: Asset Allocation, Annuitization, and Risk Aversion," NBER Working Papers 12392, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Matthias Doepke, . "Inflation as a Redistribution Shock: Effects on Aggregates and Welfare," UCLA Economics Online Papers 412, UCLA Department of Economics. [Downloadable!]
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  8. Karen E. Dynan & Jonathan Skinner & Stephen P. Zeldes, 2000. "Do the Rich Save More?," NBER Working Papers 7906, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Gabor Kezdi & Purvi Sevak, 2004. "Economic Adjustment of Recent Retirees to Adverse Wealth Shocks," Working Papers wp075, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  10. Michael Hurd & Elaine Reardon, 2003. "Real Wealth Changes from 1982 to 1991 Among the Newly Retired," Working Papers 03-15, RAND Corporation Publications Department. [Downloadable!]
  11. repec:bep:eapadv:v:7:y:2007:i:1:p:1488-1488 is not listed on IDEAS
  12. Jeffrey R. Brown, 1999. "Are the Elderly Really Over-Annuitized? New Evidence on Life Insurance and Bequests," NBER Working Papers 7193, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Joshua Aizenman & Nancy P. Marion, 1999. "Uncertainty and the Disapperance of International Credit," NBER Working Papers 7389, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Jérôme Bourdieu & Gilles Postel-Vinay & Akiko Suwa-Eisenmann, 2002. "Why a rise in wealth ownsership did not accompany growth : the puzzle of primary inequality using french data (1800-1940)," Research Unit Working Papers 0207, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
  15. Fang Yang, 2005. "Accounting for the heterogeneity in retirement wealth," Working Papers 638, Federal Reserve Bank of Minneapolis. [Downloadable!]
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  16. Günther Fink & Silvia Redaelli, 2005. "Understanding Bequest Motives An Empirical Analysis of Intergenerational Transfers," DNB Working Papers 042, Netherlands Central Bank, Research Department. [Downloadable!]
  17. Douglas Holtz-Eakin & Donald Marples, 2001. "Distortion Costs of Taxing Wealth Accumulation: Income Versus Estate Taxes," NBER Working Papers 8261, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. Westerheide, Peter, 2004. "Auswirkungen von Erbschaften und Schenkungen auf die Vermögensbildung privater Personen und Haushalte : Eine ökonometrische Analyse auf der Basis des Sozio-oekonomischen Panels," ZEW Discussion Papers 04-28, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  19. Eric French & Mariacristina De Nardi & John Bailey Jones & Olesya Baker & Phil Doctor, 2006. "Right before the end: asset decumulation at the end of life," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q III, pages 2-13. [Downloadable!]
  20. Gaobo Pang & University of Maryland, 2006. "Tax-Deferred Savings and Early Retirement," Computing in Economics and Finance 2006 31, Society for Computational Economics. [Downloadable!]
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  21. Mariacristina De Nardi, 2002. "Wealth inequality and intergenerational links," Staff Report 314, Federal Reserve Bank of Minneapolis. [Downloadable!]
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