The Effect of Social Security on Lifetime Wealth Accumulation and Bequests

David, Martín; Menchik, Paul L.

doi:10.2307/2553876

Cited by 25 publications

(9 citation statements)

References 18 publications

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“…We mention the pioneering work of David and Menchik (1982), who used state bequest data to examine the determinants of bequests. We mention the pioneering work of David and Menchik (1982), who used state bequest data to examine the determinants of bequests.…”

Section: Some Remarks On the Data Sourcementioning

confidence: 99%

Capital Accumulation and the Characteristics of Private Inter-generational Transfers

Kurz¹

1984

Economica

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JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.Many recent studies of the process of family accumulation in general and household response to social security in particular have revealed growing dissatisfaction with the life-cycle theory of saving (see, for example, Leimer and Lesnoy, 1982). An alternative to the life-cycle hypothesis is expressed by defining the preference of each family over its own consumption as well as the welfare of the generations that follow. Thus, each family consists of an infinite chain of generations who have interdependent preferences, and for this reason we shall call it the "Inter-Generational Hypothesis". It was recently used by Barro (1974Barro ( , 1978 to attack the conclusions of the life-cycle hypothesis.Our purpose in this paper is to start the long road of studying the structure of the private inter-generational transfer system with the aim of providing additional tests of the two competing hypotheses.

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Section: Some Remarks On the Data Sourcementioning

confidence: 99%

Capital Accumulation and the Characteristics of Private Inter-generational Transfers

Kurz¹

1984

Economica

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“…In addition to any contamination due to large measurement error in wealth, unanticipated capital gains at the macro level can cause observed wealth change to differ from anticipated wealth change. A second approach to understanding bequests has been to examine patterns of actual bequests, relying on estate records (David and Menchik, 1985) or on IRS data (Wilhelm, 1996). Even though estate records and IRS data can increase our understanding of the magnitude of bequest flows and of motivations for bequests, they represent bequeathing behavior of the very well-to-do, and are not representative of the general population.…”

Section: Introductionmentioning

confidence: 99%

Expected Bequests and Their Distribution

Hurd¹,

Smith²

2002

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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.

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“…Modigliani (1988) recognised the relevance of the precautionary motive, but not that of bequests, arguing that they are only important in the highest wealth brackets. David & Menchik (1985) found evidence that was incompatible with the life-cycle model of saving without bequests, and concluded that the effect of public pension system on bequest saving is dependent on age. Dynan et al (2002), using a 1998 survey of Consumer Finances, found that 45% of included households claim to save for retirement purposes, 30% for precautionary/emergency reasons, and just 8% to leave a bequest.…”

Section: Literature Reviewmentioning

confidence: 99%

Private Saving Determinants in Portugal

Garcia¹,

Rodrigues²,

Nunes³

2019

Mediterranean Journal of Social Sciences

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The combination of projected increases in the expenditure of the public pension scheme and low rates of private saving constitutes a policy challenge in Portugal. Policy debate embrace pension reform and the redoubling of household saving efforts. The purpose of this paper is to revisit the determinants of household saving in order to inform the debate with research findings, employing a constructed public pension wealth variable in a life cycle consumption/saving model pioneered by Feldstein (1974). We use time series techniques and data from 1983 to 2012. The findings show that an increase in the public pension wealth variable does not boost saving suggesting that concerns with saving to cope with the length of the life expectancy at the retirement age are not enough to reject the view that the public pension benefit is a substitute for household wealth. The other results are consistent with expectations: increases in disposable income positively impact saving; there is a significant negative propensity to save out of household wealth increase; and improvement in the government balance engender significant saving decrease.

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The Effect of Social Security on Lifetime Wealth Accumulation and Bequests

Cited by 25 publications

References 18 publications

Capital Accumulation and the Characteristics of Private Inter-generational Transfers

Capital Accumulation and the Characteristics of Private Inter-generational Transfers

Expected Bequests and Their Distribution

Private Saving Determinants in Portugal

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