Intergenerational Altruism: Estimates Based on News About Expected Mortality
43 Pages Posted: 14 Jun 2017 Last revised: 19 Sep 2019
Date Written: September 16, 2019
This paper analyzes saving decisions of 30,000 two-generations households over a period the oldest generation receives negative news about future life expectancy. The event that causes the news is a cancer diagnosis. In line with models of dynastic utility maximization, negative news about personal life expectancy has little impact on dynasty wealth. The reason is that the decline in wealth for the parent is offset by a similar increase in the wealth for the children. The size of the inter-vivos transfers and the bequest is positively related to the wealth of the parent and the severity of the diagnosis.
JEL Classification: D1, D14, D31, E21, I12
Suggested Citation: Suggested Citation