Carnegie visits nobel: Do inheritances affect labor and capital income?

Arbeitspapier

The objective of this paper is to study when and how much labor supply and savings of heirs respond to inheritances. We estimate fixed effects models following direct heirs, inheriting in 2004, during the years 2000-2008 using Swedish panel data. Our first main result is that the more the heir inherits, the lower her labor income becomes. This labor supply effect appears in the years after the heir had inherited. We also find evidence of anticipation effects that occur before the actual transfer. Our second main result is that the more the heir inherits, the higher her capital income becomes. This savings effect only appears in the years after receiving the inheritance. It disappears after a couple of years.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFN Working Paper ; No. 866

Classification and Topics

• Classification: Wirtschaft ; Household Behavior: General ; Information, Knowledge, and Uncertainty: General ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Time Allocation and Labor Supply
• Subject: inheritances ; bequests ; windfall gains ; labor supply ; capital income ; uncertainty ; Erbe ; Einkommen ; Arbeitsangebot ; Einkommenshypothese ; Schweden

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Elinder, Mikael ; Erixson, Oscar ; Ohlsson, Henry
• Event: Veröffentlichung
• (who): Research Institute of Industrial Economics (IFN)
• (where): Stockholm
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/81386