The Carnegie Conjecture: Some Empirical Evidence

30 Pages Posted: 31 Jul 2007

See all articles by Douglas Holtz-Eakin

Douglas Holtz-Eakin

Syracuse University; National Bureau of Economic Research (NBER)

David Joulfaian

U.S. Department of the Treasury, Office of Tax Analysis (OTA); Georgetown University - Department of Economics

Harvey S. Rosen

Princeton University - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: July 1992

Abstract

This paper examines tax return-generated data on the labor force behavior of people before and after they receive inheritances. The results are consistent with Andrew Carnegie's century-old assertion that large inheritances decrease a person's labor force participation. For example, a single person who receives an inheritance of over $150,000 is roughly four times more likely to leave the labor force than a person with an inheritance below $25,000. Additional, albeit weaker, evidence suggests that large inheritances depress labor supply, even when participation is unaltered.

Suggested Citation

Holtz-Eakin, Douglas and Joulfaian, David and Rosen, Harvey S., The Carnegie Conjecture: Some Empirical Evidence (July 1992). NBER Working Paper No. w4118. Available at SSRN: https://ssrn.com/abstract=476196

Douglas Holtz-Eakin (Contact Author)

Syracuse University ( email )

900 S. Crouse Avenue
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National Bureau of Economic Research (NBER)

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David Joulfaian

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave. NW
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Georgetown University - Department of Economics ( email )

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Harvey S. Rosen

Princeton University - Department of Economics ( email )

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Princeton, NJ 08544
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

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