Skip to main content
SpringerLink
Log in
Book cover

The New Palgrave Dictionary of Economics pp 6550–6557Cite as

Palgrave Macmillan

Inheritance and Bequests

  • Reference work entry
  • First Online:

  • 19 Accesses

Abstract

The importance of bequests, their role in capital accumulation, and the motivation behind these transfers has long been the subject of debate among economists. Various models of intergenerational transfers yield different predictions about the responsiveness of bequests to changes in incomes of the donors and recipients and thus to the impact public policy. Yet, despite the intuitive appeal of these models, none has proved to be consistent with empirical patterns. This article discusses the alternative theories of transfer behaviour, examines the empirical work testing their predictions, and discusses the role of estate and gift taxes in affecting bequest behaviour.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   6,499.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD   8,499.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Bibliography

  • Altonji, J., F. Hayashi, and L. Kotlikoff. 1997. Parental altruism and inter vivos transfers: Theory and evidence. Journal of Political Economy 105: 1121–1166.

    Article  Google Scholar 

  • Andreoni, J. 1989. Giving with impure altruism: Applications to charity and Ricardian equivalence. Journal of Political Economy 97: 1447–1458.

    Article  Google Scholar 

  • Barro, R. 1974. Are government bonds net wealth? Journal of Political Economy 82: 1063–1094.

    Article  Google Scholar 

  • Becker, G. 1974. A theory of social interactions. Journal of Political Economy 82: 1063–1094.

    Article  Google Scholar 

  • Behrman, J., R. Pollak, and P. Taubman. 1982. Parental preferences and provision for progeny. Journal of Political Economy 90: 52–73.

    Article  Google Scholar 

  • Bernheim, B. 1991. How strong are bequest motives? Evidence based on estimates of the demand for life insurance and annuities. Journal of Political Economy 99: 899–927.

    Article  Google Scholar 

  • Bernheim, B., R. Lemke, and J. Scholz. 2004. Do estate and gift taxes affect the timing of private transfers? Journal of Public Economics 88: 2617–2634.

    Article  Google Scholar 

  • Bernheim, B., and S. Severinov. 2003. Bequests as signals: An explanation for the equal division puzzle. Journal of Political Economy 111: 733–764.

    Article  Google Scholar 

  • Bernheim, B., A. Schleifer, and L. Summers. 1985. The strategic bequest motive. Journal of Political Economy 93: 1045–1076.

    Article  Google Scholar 

  • Carnegie, A. 1962. The advantages of poverty. In The gospel of wealth and other timely essays, ed. E. Kirkland. Cambridge, MA: Harvard University Press.

    Chapter  Google Scholar 

  • Cooper, G. 1979. Voluntary tax? New perspectives on sophisticated estate tax avoidance. Washington, DC: Brookings Institution Press.

    Google Scholar 

  • Cox, D. 1987. Motives for private income transfers. Journal of Political Economy 95: 508–546.

    Article  Google Scholar 

  • Davies, J. 1981. Uncertain lifetime, consumption, and dissaving in retirement. Journal of Political Economy 89: 561–577.

    Article  Google Scholar 

  • Gale, W., and M. Perozek. 2001. Do estate taxes reduce savings? In Rethinking estate and gift taxation, ed. W. Gale, J. Hines, and J. Slemrod. Washington, DC: Brookings Institution Press.

    Chapter  Google Scholar 

  • Holtz-Eakin, D., D. Joulfaian, and H. Rosen. 1993. The Carnegie conjecture: Some empirical evidence. Quarterly Journal of Economics 108: 413–435.

    Article  Google Scholar 

  • Hurd, M. 1987. Savings of the elderly and desired bequests. American Economic Review 77: 298–312.

    Google Scholar 

  • Johnson, B. and Eller, M. 2001. Federal taxation of inheritance and wealth transfers. Washington, DC: Statistics of Income Division, Internal Revenue Service. Online. Available at http://www.irs.gov/pub/irs-soi/inhwlttr.pdf. Accessed 7 Mar 2006.

  • Joulfaian, D. 1998. The federal estate and gift tax: Description, profile of taxpayers, and economic consequences. Office of Tax Analysis Paper 80. Washington, DC: US Department of Treasury.

    Google Scholar 

  • Joulfaian, D. 2005. Choosing between gifts and bequests: How taxes affect the timing of wealth transfers. Journal of Public Economics 89: 2069–2091.

    Article  Google Scholar 

  • Joulfaian, D., and M. Wilhelm. 1994. Inheritance and labor supply. Journal of Human Resources 29: 1205–1234.

    Article  Google Scholar 

  • Kopczuk, W., and J. Slemrod. 2001. The impact of the estate tax on the wealth accumulation and avoidance behavior of donors. In Rethinking estate and gift taxation, ed. W. Gale, J. Hines, and J. Slemrod. Washington, DC: Brookings Institution Press.

    Google Scholar 

  • Kotlikoff, L., and L. Summers. 1981. The role of intergenerational transfers in aggregate capital accumulation. Journal of Political Economy 89: 706–732.

    Article  Google Scholar 

  • Light, A., and K. McGarry. 2003. Why parents play favorite: Explanations for unequal bequests. American Economic Review 94: 1669–1681.

    Article  Google Scholar 

  • McGarry, K. 1999. Inter vivos transfers and intended bequests. Journal of Public Economics 73: 321–351.

    Article  Google Scholar 

  • Menchik, P. 1980. Primogeniture, equal sharing, and the U.S. distribution of wealth. Quarterly Journal of Economics 94: 299–316.

    Article  Google Scholar 

  • Modigliani, F. 1988. The role of intergenerational transfers and life cycle saving in the accumulation of wealth. Journal of Economic Perspectives 2(2): 15–40.

    Article  Google Scholar 

  • Perozek, M. 1998. A reexamination of the strategic bequest motive. Journal of Political Economy 106: 423–445.

    Article  Google Scholar 

  • Pollak, R. 2003. Gary Becker’s contributions to family and household economics. Review of Economics of the Household 1: 111–141.

    Article  Google Scholar 

  • Poterba, J. 1998. Estate and gift taxes and incentives for inter vivos giving in the U. S. Journal of Public Economics 79: 237–264.

    Article  Google Scholar 

  • Tomes, N. 1981. The family, inheritance, and the intergenerational transmission of inequality. Journal of Political Economy 89: 928–958.

    Article  Google Scholar 

  • U.S. Congressional Budget Office. 2004. The estate tax and charitable giving. Washington, DC: Congressional Budget Office.

    Google Scholar 

  • Wilhelm, M. 1996. Bequest behavior and the effect of heirs’ earnings: Testing the altrusitic model of bequests. American Economic Review 86: 874–892.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Kathleen McGarry

Authors
  1. Kathleen McGarry
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Copyright information

© 2018 Macmillan Publishers Ltd.

About this entry

Check for updates. Verify currency and authenticity via CrossMark

Cite this entry

McGarry, K. (2018). Inheritance and Bequests. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1952

Download citation

Publish with us

Policies and ethics

Search

Navigation