IDEAS home Printed from https://ideas.repec.org/p/lev/wrkpap/wp_482.html
   My bibliography  Save this paper

Net Intergenerational Transfers from an Increase in Social Security Benefits

Author

Listed:
  • Li Gan
  • Guan Gong
  • Michael Hurd

Abstract

When the age of death is uncertain, individuals will leave bequestsÐeven if they have no desired bequests--simply because they will hold wealth against the possibility of living longer. Bequests are accidental. Starting from a baseline level of Social Security benefits, an increase in benefits will cause consumption to increase. However, consumption may not increase by as much as the increase in Social Security, which would cause wealth to be greater than under the baseline scenario. The higher wealth levels would translate into greater bequests. Therefore, an increase in Social Security benefits may not be a complete transfer from the younger generation to the older generation. Some of the increase in benefits may be bequeathed back to the younger generation. Whether this happens depends on the form of the utility function, the amount of bequeathable wealth, and whether there is a bequest motive. The objective of this paper is to quantify for single persons how much of an increase in Social Security benefits would be bequeathed back to the younger generation. We find that, at least for singles, increases in Social Security benefits are unlikely to be offset by bequests.

Suggested Citation

  • Li Gan & Guan Gong & Michael Hurd, 2006. "Net Intergenerational Transfers from an Increase in Social Security Benefits," Economics Working Paper Archive wp_482, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_482
    as

    Download full text from publisher

    File URL: http://www.levyinstitute.org/pubs/wp_482.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Gan, Li & Gong, Guan & Hurd, Michael & McFadden, Daniel, 2015. "Subjective mortality risk and bequests," Journal of Econometrics, Elsevier, vol. 188(2), pages 514-525.
    2. Li Gan & Michael D. Hurd & Daniel L. McFadden, 2005. "Individual Subjective Survival Curves," NBER Chapters,in: Analyses in the Economics of Aging, pages 377-412 National Bureau of Economic Research, Inc.
    3. Hurd, Michael D, 1989. "Mortality Risk and Bequests," Econometrica, Econometric Society, vol. 57(4), pages 779-813, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:lev:wrkpap:wp_482. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Dunn). General contact details of provider: http://www.levyinstitute.org .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.