Intergenerational Transfers in the Health and Retirement Study Data
Many economic analyses of public policy issues are based upon the life-cycle model of household behavior. The usual formulation omits private intergenerational transfers. This paper considers the possibility of a more sophisticated formulation that includes the latter. We examine 1992-2008 HRS data on inheritances and inter vivos gifts. We uncover an underreporting problem in the data: a household’s financial respondent often seems to understate transfers from his/her in-laws. Nevertheless, other aspects of the data seem very useful. About 30-40 percent of households eventually inherit. Inheritances seem to reflect a mixture of intentional and accidental bequests, with the latter twice as prevalent.
We analyze data from the Health and Retirement Study (HRS) on private intergenerational transfers between parents and children to assess the magnitude of such transfers and the possible motives behind them.
- We find that a household’s financial respondent often seems to understate transfers from his or her in-laws. Thus, overall inheritances are substantially understated.
- About 30-40 percent of households eventually inherit.
- Inheritances are a mixture of intentional and accidental bequests, with the latter twice as prevalent.
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Paper IDWP 2010-238