Expected Bequests and Their Distribution

Hurd, Michael D.; Smith, James P.

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Expected Bequests and Their Distribution

NBER Working Paper No. w9142

37 Pages Posted: 15 Sep 2002 Last revised: 26 Jun 2022

See all articles by Michael D. Hurd

Michael D. Hurd

RAND Corporation; State University of New York at Stony Brook - College of Arts and Science - Department of Economics; National Bureau of Economic Research (NBER)

James P. Smith

RAND Corporation; IZA Institute of Labor Economics

Date Written: September 2002

Abstract

Based on a sample of actual bequests that is population-representative and on the subjective probability of bequests, we estimate the distribution of bequests that the older population will make. We find that the distribution is highly skewed, so that the typical baby-boom person will receive a very modest inheritance. This is partly due to the skewed distribution of wealth and partly due to the tendency of the wealthy to have fewer children. But it is also due to anticipated dissaving: we estimate that households in the age band 70-74 will bequeath just 39% of their wealth, consuming the rest before they die.

Suggested Citation: Suggested Citation

Hurd, Michael D. and Smith, James P., Expected Bequests and Their Distribution (September 2002). NBER Working Paper No. w9142, Available at SSRN: https://ssrn.com/abstract=330981