Abstract

http://ssrn.com/abstract=986955
 
 

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The Joy of Giving or Assisted Living? Using Strategic Surveys to Separate Bequest and Precautionary Motives


John Ameriks


The Vanguard Group, Inc.

Andrew Caplin


New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER)

Steven Laufer


Federal Reserve Board

Stijn Van Nieuwerburgh


New York University Stern School of Business, Department of Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

May 2007

NBER Working Paper No. w13105

Abstract:     
Strong bequest motives can explain low retirement spending, but so equally can strong precautionary motives. Given this identification problem, the recent tradition has been largely to ignore bequest motives. We develop a rich model of spending in retirement that allows for both motives, and introduce a "Medicaid aversion" parameter that plays a key role in determining precautionary savings. We implement a "strategic" survey to resolve the identification problem between bequest and precautionary motives. We find that strong bequest motives are too prevalent to be ignored. Moreover, Medicaid aversion is widespread, and helps explain the low spending of many middle class retirees.

Number of Pages in PDF File: 58

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Date posted: June 27, 2007  

Suggested Citation

Ameriks, John and Caplin, Andrew and Laufer, Steven and Van Nieuwerburgh, Stijn, The Joy of Giving or Assisted Living? Using Strategic Surveys to Separate Bequest and Precautionary Motives (May 2007). NBER Working Paper No. w13105. Available at SSRN: http://ssrn.com/abstract=986955

Contact Information

John Ameriks
The Vanguard Group, Inc. ( email )
P.O. Box 2600
MS V36
Valley Forge, PA 19482-2600
United States
610-503-5676 (Phone)
Andrew Caplin (Contact Author)
New York University (NYU) - Department of Economics ( email )
269 Mercer Street
New York, NY 10003
United States
212-998-8950 (Phone)
212-995-3932 (Fax)
HOME PAGE: http://www.econ.nyu.edu/user/caplina/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Steven Laufer
Federal Reserve Board ( email )
20th Street and Constitution Avenue NW
Washington, DC 20551
United States
202-475-6608 (Phone)
202-728-5889 (Fax)
Stijn Van Nieuwerburgh
New York University Stern School of Business, Department of Finance ( email )
44 West 4th Street
Suite 9-190
New York, NY 10012-1126
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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Citations:  22

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