The Impact of Demographic Change on Intergenerational Transfers in the Form of Bequests

Brittney Wagner, Queens College, City University of New York (CUNY)

We analyze the consequences of demographic change for the size of intergenerational transfers in the form of bequests and for the timing over the life course when individuals receive an inheritance. All else being equal, longer life implies that people get bequests when they are older. Increasing generational length has the opposite effect, as it reduces the average age at which people receive bequests. Lower fertility tends to increase the size of inheritances that individuals receive. Our analysis, based on formal demographic methods and empirical estimates from the Panel Study of Income Dynamics (PSID), shows that a long-term trend of increasing size of bequests and age at receiving inheritance might have come to a halt and may reverse in the near future. The results have important implications for the multigenerational transmission of inequality.