Expected Bequests and Current Wealth in SHARE
AbstractThe life-cycle theory predicts that wealth should be fully annuitized to insure longevity risks. If annuity markets are incomplete and elderly individuals face other risks (notably, health risks) wealth holdings will include other financial and real assets. However, the life-cycle model under uncertainty does imply that non-annuitized wealth should be decumulated in old age. The extent to which this happens is an open issue. There are three questions in SHARE that provide information on intended bequests: they record the probability that the respondent will give any bequest, a bequest above 50,000 euro or a bequest above 150,000 euro. Using this information and current wealth holdings in SHARE data we assess whether and to what extent households plan to decumulate assets in old age. We build upon previous work by Hurd and Smith (2002) to estimate expected bequests for each respondent, and show how bequests differ across countries. This estimation assigns the expected value of the intended bequest conditional on being in a stated bequest interval and on various covariates (demographics, current income and wealth, health status etc). By comparing the current wealth holdings and the expected intended bequests we compute the pattern of future saving and assess its variability with respect to presence and of children, as well as current health and economic indicators
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 20.
Date of creation: 04 Jul 2006
Date of revision:
life cycle theory; bequests; wealth;
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Luigi, Cannnari & Giovanni, D'Alessio, 2008. "Intergenerational Transfers in Italy," MPRA Paper 15111, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.