Unequal Bequests

56 Pages Posted: 5 Mar 2015

See all articles by Marco Francesconi

Marco Francesconi

University of Essex; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Robert A. Pollak

Washington University in St. Louis - John M. Olin Business School; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Domenico Tabasso

University of Essex - Department of Economics; IZA (Institute for the Study of Labour); Fondazione Rodolfo Debenedetti

Multiple version iconThere are 4 versions of this paper

Date Written: February 26, 2015

Abstract

Using data from the Health and Retirement Study (HRS), we make two contributions to the literature on end-of-life transfers. First, we show that unequal bequests are much more common than generally recognized, with one-third of parents with wills planning to divide their estates unequally among their children. These plans for unequal division are particularly concentrated in complex families, that is, families with stepchildren and families with genetic children with whom the parent has had no contact (e.g., children from previous marriages). We find that in complex families past and current contact between parents and children reduces or eliminates unequal bequests. Second, although the literature focuses on the bequest intentions of parents who have made wills, we find that many elderly Americans have not made wills. Although the probability of having a will increases with age, 30 percent of HRS respondents aged 70 and over have no wills. Of HRS respondents who died between 1995 and 2010, 38 percent died intestate (i.e., without wills). Thus, focusing exclusively on the bequest intentions of parents who have made wills provides an incomplete and misleading picture of end-of-life transfers.

Keywords: bequests, intergenerational transfers, altruism, exchange, evolutionary motives, family structure

JEL Classification: D130, J120, K360

Suggested Citation

Francesconi, Marco and Pollak, Robert A. and Tabasso, Domenico, Unequal Bequests (February 26, 2015). CESifo Working Paper Series No. 5202, Available at SSRN: https://ssrn.com/abstract=2573581

Marco Francesconi (Contact Author)

University of Essex ( email )

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Robert A. Pollak

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Domenico Tabasso

University of Essex - Department of Economics ( email )

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