IDEAS home Printed from https://ideas.repec.org/a/iza/izawol/journly2014n69.html
   My bibliography  Save this article

Inheritance, bequests, and labor supply

Author

Listed:
  • Donald Cox

    (Boston College, USA)

Abstract

Inheriting money can be a problem since the new wealth might sap the beneficiaries’ incentive to work. Or it could do the opposite, by facilitating entrepreneurship among those whose ambition to start a business had been stymied by a lack of cash. Recent evidence suggests inheritance-related work disincentives can be strong—unexpected inheritances can matter a lot for early retirement, for example. But where inheritances facilitate self-employment, as some evidence suggests, the labor supply might increase.

Suggested Citation

  • Donald Cox, 2014. "Inheritance, bequests, and labor supply," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-69, September.
    • Handle: RePEc:iza:izawol:journl:y:2014:n:69
    as

    Download full text from publisher

    File URL: http://wol.iza.org/articles/inheritance-bequests-and-labor-supply-1.pdf
    Download Restriction: no
    File URL: http://wol.iza.org/articles/inheritance-bequests-and-labor-supply
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1993. "The Carnegie Conjecture: Some Empirical Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(2), pages 413-435.
    2. Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February.
    3. David Joulfaian & Mark O. Wilhelm, 1994. "Inheritance and Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 29(4), pages 1205-1234.
    4. Wojciech Kopczuk, 2012. "Taxation of Intergenerational Transfers and Wealth," NBER Working Papers 18584, National Bureau of Economic Research, Inc.
    5. Erik Hurst & Annamaria Lusardi, 2004. "Liquidity Constraints, Household Wealth, and Entrepreneurship," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 319-347, April.
    6. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1992. "Entrepreneurial Decisions and Liquidity Constraints," Working Papers 679, Princeton University, Department of Economics, Industrial Relations Section..
    7. Elinder Mikael & Erixson Oscar & Ohlsson Henry, 2012. "The Impact of Inheritances on Heirs' Labor and Capital Income," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-37, December.
    8. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer.
    9. Jeffrey R. Brown & Courtney C. Coile & Scott J. Weisbenner, 2010. "The Effect of Inheritance Receipt on Retirement," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 425-434, May.
    10. Alicia H. Munnell & Anthony Webb & Zhenya Karamcheva & Andrew Eschtruth, 2011. "How Important Are Intergenerational Transfers for Baby Boomers?," Working Papers, Center for Retirement Research at Boston College wp2011-2, Center for Retirement Research, revised Jan 2011.
    11. Scheve, Kenneth & Stasavage, David, 2012. "Democracy, War, and Wealth: Lessons from Two Centuries of Inheritance Taxation," American Political Science Review, Cambridge University Press, vol. 106(1), pages 81-102, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jonathan Spiteri & Philip Brockdorff, 2023. "Household Wealth and Inheritance Transfers: Evidence from the Euro Area," Journal of Family and Economic Issues, Springer, vol. 44(3), pages 619-633, September.
    2. Jaime Alonso-Carrera & Jordi Caballé & Xavier Raurich, 2016. "Intergenerational Mobility under Education-Effort Complementarity," UB School of Economics Working Papers 2016/351, University of Barcelona School of Economics.
    3. Jordi Caballé, 2016. "Intergenerational mobility: measurement and the role of borrowing constraints and inherited tastes," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 7(4), pages 393-420, November.
    4. Aviad Tur-Sinai & Harald Künemund & Claudia Vogel, 2022. "Inheritances and work for pay — will the expected wave of bequests undermine active ageing policies?," European Journal of Ageing, Springer, vol. 19(4), pages 1251-1261, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:iza:izawol:journl:y:2014:p:69 is not listed on IDEAS
    2. Andreas Eder, 2016. "The impact of inheritances on the retirement behavior of older Europeans," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(2), pages 299-331, May.
    3. Karina Doorley & Nico Pestel, 2020. "Labour Supply after Inheritances and the Role of Expectations," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(4), pages 843-863, August.
    4. Erlend E. Bø & Elin Halvorsen & Thor O. Thoresen, 2019. "Heterogeneity of the Carnegie Effect," Journal of Human Resources, University of Wisconsin Press, vol. 54(3), pages 726-759.
    5. Goupille-Lebret, Jonathan & Infante, Jose, 2018. "Behavioral responses to inheritance tax: Evidence from notches in France," Journal of Public Economics, Elsevier, vol. 168(C), pages 21-34.
    6. Xiaoguang Ling, 2022. "Heterogeneous earning responses to inheritance: new event-study evidence from Norway," Papers 2209.10256, arXiv.org, revised Nov 2022.
    7. Ignacio Belloc & José Alberto Molina & Jorge Velilla, 2025. "Unexpected Inheritances and Household Labor Supply: Does the Identity of the Recipient Matter?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 71(1), February.
    8. Elinder Mikael & Erixson Oscar & Ohlsson Henry, 2012. "The Impact of Inheritances on Heirs' Labor and Capital Income," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-37, December.
    9. Elinder, Mikael & Erixson, Oscar & Waldenström, Daniel, 2018. "Inheritance and wealth inequality: Evidence from population registers," Journal of Public Economics, Elsevier, vol. 165(C), pages 17-30.
    10. Wojciech Kopczuk, 2012. "Taxation of Intergenerational Transfers and Wealth," NBER Working Papers 18584, National Bureau of Economic Research, Inc.
    11. Jeffrey R. Brown & Courtney C. Coile & Scott J. Weisbenner, 2010. "The Effect of Inheritance Receipt on Retirement," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 425-434, May.
    12. Eduard Suari-Andreu, 2023. "Labour supply, retirement, and consumption responses of older Europeans to inheritance receipt," Empirical Economics, Springer, vol. 64(1), pages 33-75, January.
    13. Jaime Alonso-Carrera & Xavier Raurich & Jordi Caballé, 2016. "Intergenerational Mobility under Education-Effort Complementarity," Working Papers 905, Barcelona School of Economics.
    14. David Joulfaian, 2006. "Inheritance and Saving," NBER Working Papers 12569, National Bureau of Economic Research, Inc.
    15. Fredrik Carlsen & Jostein Grytten & Irene Skau, 2011. "Physician response to fee changes: using inheritance as a quasi-natural experiment," Applied Economics, Taylor & Francis Journals, vol. 43(15), pages 1913-1922.
    16. Li, Yue & Mastrogiacomo, Mauro & Hochguertel, Stefan & Bloemen, Hans, 2016. "The role of wealth in the start-up decision of new self-employed: Evidence from a pension policy reform," Labour Economics, Elsevier, vol. 41(C), pages 280-290.
    17. Dominik Bernhofer & Michael Ertl & Petra Innreiter & Pascal Schraml & Eva Six & Max Wehsely, 2024. "Ausgestaltung und Herausforderungen einer modernen Erbschafts- und Schenkungssteuer in Österreich," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 50(1), pages 43-81.
    18. Horioka, Charles Yuji & Gahramanov, Emin & Hayat, Aziz & Tang, Xueli, 2021. "The impact of bequest motives on labor supply and retirement behavior in Japan: A theoretical and empirical analysis," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    19. Kindermann, Fabian & Mayr, Lukas & Sachs, Dominik, 2020. "Inheritance taxation and wealth effects on the labor supply of heirs," Journal of Public Economics, Elsevier, vol. 191(C).
    20. Clemens, Christiane & Heinemann, Maik, 2010. "On entrepreneurial risk-taking and the macroeconomic effects of financial constraints," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1610-1626, September.
    21. Weber, Jeremy G. & Key, Nigel D., 2013. "Does proprietor wealth influence small business decisions? Land appreciation and farm business borrowing, land ownership, and output," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150408, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    inheritance; bequests; labor supply; estate tax; self-employment;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izawol:journl:y:2014:n:69. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Institute of Labor Economics (IZA) (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.