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Is a Bird in Hand Worth More than a Bird in the Bush? Intergenerational Transfers and Savings Behavior

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  • Jeffrey R. Brown
  • Scott J. Weisbenner

Abstract

This paper provides new evidence on the decomposition of aggregate household wealth into life-cycle and transfer wealth. Using the 1998 Survey of Consumer Finances, it finds that transfer wealth accounts for approximately one-fifth to one-quarter of aggregate wealth, suggesting a larger role for life-cycle savings than some previous estimates. Despite the smaller aggregate size of transfer wealth, its concentration among a small number of households suggests that it can still have an important effect on the savings decisions of recipients. Estimates suggest that past receipts of transfer wealth reduce life-cycle savings by as much as dollar-for-dollar, while expected future transfers do not produce such a crowd-out effect.

Suggested Citation

  • Jeffrey R. Brown & Scott J. Weisbenner, 2002. "Is a Bird in Hand Worth More than a Bird in the Bush? Intergenerational Transfers and Savings Behavior," NBER Working Papers 8753, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8753
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    References listed on IDEAS

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    Cited by:

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    2. Edward Wolff & Maury Gittleman, 2014. "Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(4), pages 439-468, December.

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