Intergenerational Transfers and the Accumulation of Wealth

17 Pages Posted: 4 Jul 2014

See all articles by William G. Gale

William G. Gale

Brookings Institution

John Karl Scholz

University of Wisconsin - Madison - La Follette School of Public Affairs

Date Written: 1994

Abstract

Households acquire wealth from two sources: they save out of income they have earned, and they receive transfers from other people. The first method of wealth accumulation goes under the name of life-cycle saving, in which people save during their working lives and dissave after retirement; the second involves either an inter vivos transfer (that is, a transfer between living people) or a bequest (a transfer that occurs at the death of the donor). While inter vivos transfers and bequests will arise in dynastic models where preferences include a taste for the well-being of one's descendents, few empirical life-cycle models reflect these concerns. Indeed, a sharp debate has arisen over the ability of the simple life-cycle model to explain observed wealth accumulation.

Keywords: wealth accumulation, intergenerational transfers

JEL Classification: D91, D31

Suggested Citation

Gale, William G. and Scholz, John Karl, Intergenerational Transfers and the Accumulation of Wealth (1994). Available at SSRN: https://ssrn.com/abstract=2461797 or http://dx.doi.org/10.2139/ssrn.2461797

William G. Gale (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6148 (Phone)
202-797-6181 (Fax)

John Karl Scholz

University of Wisconsin - Madison - La Follette School of Public Affairs

1225 Observatory Drive
Madison, WI 53705
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
20
Abstract Views
291
PlumX Metrics
!

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information