SFB 303 Discussion Paper No. A - 197

Author: Menchik, Paul L., F. Owen Irvine, and Nancy A. Jianakoplos
Title: Determinants of Intended Bequests
Abstract: In this paper we attempt to estimate the determinants of the intent to bequeath using data from the National Longitudinal Surveys (NLS) of mature men. We want to test some models of bequests that have appeared in the literature in recent years. The preliminary results we will report here support the human capital model which implies that parents will efficiently invest in education before desiring to make financial bequests to their children. A new insight is that the composition as well as the number of children may influence the intent to bequeath. In particular, if this finding that sons have a greater negative impact on the intent to bequeath than daughters is correct, it is consistent with the hypothesis that the marginal product of education was higher for males than females during the sample period. We found some limited support for the golden rule model of bequests, but to date have found no support for the altruist and the annuities models in our research. Cross tabulations suggest that frequency of contact between parents and children increases the intent to bequeath. This is consistent with power and manipulation models of bequests as well as with less-calculating hypotheses. In future research we plan to refine the econometric specification of the equations estimated in this paper. In particular we will estimate regression models to test the annuity and power-and-manipulation models of bequests.
Creation-Date: 1988
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