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The equal division puzzle – empirical evidence on intergenerational transfers in Sweden

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  • Ohlsson, Henry

    () (Department of Economics)

Abstract

The objective of this paper is to study to what extent parents divide their estates unequally between their children. Unequal sharing of parental transfers is, for example, a necessary condition for theories of altruistic (dynastic) behavior to hold. I use a new data set based on the estate reports for 230 widows, widowers, and divorcees from the city of Stockholm, Sweden deceased in 2004. Unequal sharing is unusual, depending on definitions only 7–25 percent of the estates are unequally divided. The data set is also used to estimate probit models for the likelihood of unequal sharing. A first main result is that the probability of unequal sharing is increasing in the size of the estate. Second, the older the children are on average the more likely is unequal sharing. Finally, unequal sharing is more common among deceased from some neighborhoods of the city compared to deceased from other neighborhoods.

Suggested Citation

  • Ohlsson, Henry, 2007. "The equal division puzzle – empirical evidence on intergenerational transfers in Sweden," Working Paper Series 2007:10, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uunewp:2007_010
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    References listed on IDEAS

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    1. Paul L. Menchik, 1980. "Primogeniture, Equal Sharing, and the U.S. Distribution of Wealth," The Quarterly Journal of Economics, Oxford University Press, vol. 94(2), pages 299-316.
    2. Lundholm, Michael & Ohlsson, Henry, 2000. "Post mortem reputation, compensatory gifts and equal bequests," Economics Letters, Elsevier, vol. 68(2), pages 165-171, August.
    3. Audrey Light & Kathleen McGarry, 2004. "Why Parents Play Favorites: Explanations for Unequal Bequests," American Economic Review, American Economic Association, vol. 94(5), pages 1669-1681, December.
    4. McGarry, K. & Schoeni, R.F., 1995. "Transfer Behavior With the Family: Results from the Asset and Health Dynamics Survey," Papers 95-09, RAND - Labor and Population Program.
    5. B. Douglas Bernheim & Sergei Severinov, 2003. "Bequests as Signals: An Explanation for the Equal Division Puzzle," Journal of Political Economy, University of Chicago Press, vol. 111(4), pages 733-764, August.
    6. McGarry, Kathleen, 1999. "Inter vivos transfers and intended bequests," Journal of Public Economics, Elsevier, pages 321-351.
    7. Laitner, John, 1993. "Intergenerational and interhousehold economic links," Handbook of Population and Family Economics,in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 5, pages 189-238 Elsevier.
    8. Leslie McGranahan, 2006. "Will writing and bequest motives: early 20th century Irish evidence," Working Paper Series WP-06-18, Federal Reserve Bank of Chicago.
    9. Dunn, Thomas A. & Phillips, John W., 1997. "The timing and division of parental transfers to children," Economics Letters, Elsevier, vol. 54(2), pages 135-137, February.
    10. Jere R. Behrman & Mark R. Rosenzweig, 2004. "Parental Allocations to Children: New Evidence on Bequest Differences among Siblings," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 637-640, May.
    11. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-546, June.
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    Citations

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    Cited by:

    1. 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.
    2. Andrew Ellul & Marco Pagano & Fausto Panunzi, 2010. "Inheritance Law and Investment in Family Firms," American Economic Review, American Economic Association, vol. 100(5), pages 2414-2450, December.
    3. Ohlsson, Henry, 2011. "The legacy of the Swedish gift and inheritance tax, 1884–2004," European Review of Economic History, Cambridge University Press, vol. 15(03), pages 539-569, December.
    4. Holmlund, Bertil, 2014. "What do labor market institutions do?," Labour Economics, Elsevier, pages 62-69.
    5. Katarina Nordblom & Henry Ohlsson, 2011. "Bequests, gifts, and education: links between intergenerational transfers," Empirical Economics, Springer, pages 343-358.
    6. Elinder, Mikael & Erixson, Oscar & Escobar, Sebastian & Ohlsson, Henry, 2014. "Estates, bequests, and inheritances in Sweden - A look into the Belinda databases," Working Paper Series, Center for Fiscal Studies 2014:14, Uppsala University, Department of Economics.
    7. Erixson, Oscar & Ohlsson, Henry, 2014. "Estate division: Equal sharing as choice, social norm, and legal requirement," Working Paper Series 2014:1, Uppsala University, Department of Economics.
    8. HAMAAKI Junya & HORI Masahiro & MURATA Keiko, 2016. "The Intra-Family Division of Bequests and Bequest Motives: Empirical Evidence from a Survey on Japanese Households," ESRI Discussion paper series 333, Economic and Social Research Institute (ESRI).
    9. Ohlsson, Henry, 2007. "Tax avoidance - a natural experiment," Working Paper Series 2007:13, Uppsala University, Department of Economics.
    10. Kevin Wiseman & Ctirad Slavık, 2009. "Tough Love For Lazy Kids," 2009 Meeting Papers 1091, Society for Economic Dynamics.
    11. Katarina Nordblom & Henry Ohlsson, 2011. "Bequests, gifts, and education: links between intergenerational transfers," Empirical Economics, Springer, pages 343-358.

    More about this item

    Keywords

    bequests; inheritances; equal division; altruism;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D10 - Microeconomics - - Household Behavior - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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