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Expected Bequests and Their Distribution

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  • 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.
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Suggested Citation

  • Michael D. Hurd & James P. Smith, 2003. "Expected Bequests and Their Distribution," Working Papers DRU-3007, RAND Corporation.
    • Handle: RePEc:ran:wpaper:dru-3007
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    References listed on IDEAS

    as
    1. Michael D. Hurd & James P. Smith, 2001. "Anticipated and Actual Bequests," NBER Chapters, in: Themes in the Economics of Aging, pages 357-392, National Bureau of Economic Research, Inc.
    2. Michael D. Hurd & Monika Reti, 2001. "The Effects of Large Capital Gains on Work and Consumption Evidence from Four Waves of the HRS," Working Papers DRU-3011, RAND Corporation.
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    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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