Bequest motives: a comparison of Sweden and the United States

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper reviews four well-known theoretical models of private bequest behavior, notes their di¤ering implications for public policy, and discusses a way of empirically discriminating among them. Then it implements the test with micro data from Sweden (LLS) and the U.S. (PSID). The so-called altruistic (or dynastic) model, which, among the four models, has perhaps the most wide-ranging implications for policy, receives some, though limited, support in the LLS, but not the PSID. The inter-country di¤erence is statistically signi…cant. There is evidence of a potential complication due to a dependence of children's education on parents …nancial status in the case of the U.S. Terms of use: Documents in EconStor may

The Marginal Propensity to Spend on Adult Children

“…Using three household surveys, Dynan et al (2000) document that savings rates and wealth-income ratios increase with a measure of lifetime income. 39 We checked if our PSID results are consistent with Dynan et al's Þndings. We computed wealth-income ratios using a model similar to the one included in Model II in Table 3.1.…”

“…The coefficient (standard error) is .31 (.63), positive, but not statistically different from zero. 39 Their results contradict Gustman and Steinmeier (1998), who use social security earnings records matched to the HRS. 40 The result is robust to a number changes in the deÞnition of permanent income, such as dropping our correction for secular growth in wages.…”

The Marginal Propensity to Spend on Adult Children

“…Using three household surveys, Dynan et al (2000) document that savings rates and wealth-income ratios increase with a measure of lifetime income. 39 We checked if our PSID results are consistent with Dynan et al's findings. We computed wealth-income ratios using a model similar to the one included in Model II in Table 3.1.…”

Bequests, control rights, and cost–benefit analysis

“…We saw from equation (6) that @z 2 =@ z 1 = 1 + r. Making this substitution in (14) and comparing to (15) shows that the conditions for maximizing steadystate consumption and for maximizing the mother's welfare di¤er. We have:…”

“…Laitner and Ohlsson (2001) study Sweden and the United States, …nding that parental bequests increase with the parents' lifetime resources, and decline with the earnings potential of the heir. These results are consistent with both an altruistic motive and a strategic bequest motive, but, the authors state, perhaps better …ts the strategic bequest motive.…”