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Unexpected Inheritances and Household Labor Supply: Does the Identity of the Recipient Matter?

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  • Belloc, Ignacio

    (University of Zaragoza)

  • Molina, José Alberto

    (University of Zaragoza)

  • Velilla, Jorge

    (University of Zaragoza)

Abstract

Traditionally, the data of inheritances in surveys are analysed assuming that they are equally shared within households. However, inheritances are individual assets, regardless of the marital property regime adopted at the time of marriage. In this paper, we examine the impact of individual unexpected inheritances on the household labor supply. To do so, we use data from the SHARE for the years 2006-2015 from 13 European countries and adopt a collective perspective to analyze whether inheritances are equally distributed within the household or, on the contrary, the identity of the recipient matters. We reject the inheritance pooling hypothesis, in favour of the intrahousehold approach. Our results suggest that females decrease their labor force participation by 5.3 percentage points if they have received an unexpected inheritance since the prior interview. We find no impact of inheritances on the labor supply of males. These results suggest that estimates based on the inheritance pooling hypothesis, a pure unitary perspective, may be biased downwards.

Suggested Citation

  • Belloc, Ignacio & Molina, José Alberto & Velilla, Jorge, 2023. "Unexpected Inheritances and Household Labor Supply: Does the Identity of the Recipient Matter?," IZA Discussion Papers 16620, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp16620
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    Keywords

    inheritance pooling hypothesis; intrahousehold allocation; inheritances; SHARE;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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