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Bequest behavior and the effect of heirs' earnings: testing the altruistic model of bequests
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In this article, the authors used a new data set centered on federal estate tax returns, and found that little support can be found for an altruistic theory of bequests, which has implications for macroeconomic policy, government transfer programs, and inequality.Abstract:
That parents transfer resources to children because of altruistic concern is a reasonable a priori assumption. However, economic theories of altruistic transfers have produced many counterintuitive conclusions and, consequently, much debate. When applied to bequests, these theories predict that inheritances will compensate for earnings differences between siblings as well as between parents and children. This paper tests these implications. Using a new data set centered on federal estate tax returns, little support can be found for an altruistic theory of bequests. This finding has implications for macroeconomic policy, government transfer programs, and inequality. Copyright 1996 by American Economic Association.(This abstract was borrowed from another version of this item.)read more
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References
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A Theory of Social Interactions
TL;DR: In this paper, a general treatment of social interactions into the modern theory of consumer demand is presented, where various characteristics of different persons are assumed to affect the utility functions of some persons, and the behavioral implications are systematically explored.
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An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility
Gary S. Becker,Nigel Tomes +1 more
TL;DR: The theory of inequality and intergenerational mobility presented in this paper assumes that each family maximizes a utility function spanning several generations, which depends on the consumption of parents and on the quantity and quality of their children.
Journal ArticleDOI
The Strategic Bequest Motive
TL;DR: The authors developed a simple model of strategic bequests in which a testator influences the decisions of his beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequesques on the beneficiaries' actions.