Wealth Distribution and Optimal Inheritance Taxation in Life-Cycle Economies with Intergenerational Transfers

Arbeitspapier

We introduce intergenerational transfers into a general equilihrium life-cycle model in order to explain observed levels of wealth heterogeneity. In our overlapping generations model, heterogenous agents face uncertain lifetime and leave both accidental and voluntary bequests to their cinldren. Furthermore, agents face stochastic employment opportunities. The model is calibrated with regard to the characteristics of the US economy. Our resuits indicate that hequests onl account for a sniall proportion of ohserved wealth heterogeneitv. The introduction of an inheritance tax increases both welfare are measured by the average value of the newborn and equality of the wealth distribution. Preliminary versions of this paper have been presented at conference on 'Intergenerational transfers, taxes and the distribution of wealth´ in Uppsala 1999 and the Econoinetric Societv European Meetirig in Santiago dc Compostela 1999. We would like to thank Michael Kaganovieli. John Laitner, James Smith, Frank Stafford, and Carl Cristian von Weizsäcker for comments on earlier versions of the paper. All remaining errors are ours.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Munich Discussion Paper ; No. 2000-10

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Computable General Equilibrium Models ; Macroeconomics: Consumption; Saving; Wealth
• Subject: Wealth Distribution ; Overlapping Generations ; Bequests ; Optimal Taxation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Heer, Burkhard
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (where): München
• (when): 2000

Further information

• DOI: doi:10.5282/ubm/epub.25
• Handle: http://hdl.handle.net/10419/104076
• URN: urn:nbn:de:bvb:19-epub-25-5
• Last update: 10.03.2025, 11:45 AM CET