BMC Medical Research Methodology, (2023) 23:134
Economic and demographic factors have underpinned the rising importance of inheritance flows across advanced economies. Leveraging Italian data on expected and realized inter-generational asset transfers, this paper shows that their influence extends before the actual transfers and beyond the transferred assets, uncovering a strong, positive conditional association between inheritance expectations and the pursuit of higher education. This association is driven by expected housing wealth, pointing at long-run determinants. The intention to leave a bequest, in fact, is strongly associated with having received one, or the expectation to receive one in the future, consistently with heterogeneity in dynastic altruism. I develop a simple model to rationalize these empirical findings, where bequest motives and anticipated inheritances are interconnected through dynastic altruism, influencing the inter-temporal trade-off associated with education and perpetuating inter-generational educational and income disparities. Through a richer quantitative lifecycle model, I show that heterogeneity in long-term bequest motives quantitatively explains the bulk of the differences in student rates. Finally, I study the effect of introducing estate taxation and stregthening income support, and illustrate how removing uncertainty around education returns would nearly dissolve the link between dynastic altruism and education choices.
Presented at: UPF Applied Lunch Seminar, BSE Jamboree, Helsinki PhD Workshop on Economics of Education, EALE 2023 (Prague), UPF-CREI Macro Lunch, 1st Imperial College PhD Conference in Economics and Finance
We document that higher income inequality is associated with higher current account balances for a large set of countries. A 1 percentage point increase in the share of income earned by the top 1 percent is associated with a 0.4-0.8 percentage point higher current account balance. This relation is driven by differences in saving rates but not investment. We rationalize this finding through a two-country heterogeneous agent model and show that, all else equal, capital flows from unequal to equal countries. Non-homotheticities in preferences generate higher saving rates by rich households which translate into current account surpluses under international capital mobility. The model also incorporates an explicit role for financial markets. We illustrate how financial forces can offset the effects of inequality and induce current account deficits in unequal countries such as the United States.
Presented at (* if by coauthor): 12th PhD Student Conference on International Macroeconomics (Paris Nanterre), European Central Bank IPA Economic Meeting*, Bank for International Settlements Research Seminar*, 2023 Annual Meeting of the Central Bank Research Association - CEBRA (New York), 23rd RIEF Doctoral Meeting*
In surveys, it is seldom possible to obtain the most accurate available measure of any variable of interest, given the high costs (monetary and not) associated to the necessary procedures. In the context of Understanding Society, we consider the setting of blood pressure measurements as gathered by nurses and compare them with self-taken and interviewer-taken ones. Assuming classical measurement error for nurse-taken measures and non-classical error for the other two sources, we estimate the parameters of interest through Generalised Method of Moments (GMM) in order to correct for any possible bias in measures exhibiting non-classical error.