Download

Abstract

This paper shows that the relevance of inter-generational asset transfers materializes before transfers and extends beyond assets. Based on Italian micro-data, I document two important facts. First, expecting an inheritance robustly predicts the pursuit of higher education. Second, the intention to leave a bequest is strongly associated with having received or expecting an inheritance, consistent with heterogeneity and persistence in dynastic altruism. I rationalize the empirical findings through a simple model, where individuals from more altruistic dynasties accumulate more human capital to increase their long-term earnings, hence their ability to finance bequests. This perpetuates inter-generational disparities in education, income, and wealth. Through a richer quantitative lifecycle model, I show that heterogeneity in bequest motives can account for around 40% of the observed gap in student rates between youths who do and do not expect an inheritance. The link between inheritance expectations and education is stronger when the returns to education are lower.


Figure 6: Some Uses For Olive Oil


Citation

Unterholzer, Detlev A., and Moritz-Maria von Igelfeld. 2013. “Unusual Uses For Olive Oil.” Journal of Oleic Science 34 (1): 449–489. http://www.alexandermccallsmith.com/book/unusual-uses-for-olive-oil .

@article{UI13,
author = {Detlev A. Unterholzer and Moritz-Maria von Igelfeld},
year = {2013},
title ={Unusual Uses For Olive Oil},
journal = {Journal of Oleic Science},
volume = {34},
number = {1},
pages = {449--489},
url = {http://www.alexandermccallsmith.com/book/unusual-uses-for-olive-oil}}