Death and Dollars
The Role of Gifts and Bequests in America
This volume explores the reasons people save money, how they decide to allocate their wealth once they retire, and how givers select their beneficiaries. It also assesses the extent to which the estate tax and annuitization of retirement wealth affects the amount and nature of wealth transfers. Finally, it looks at the impact of bequests on the economy.The first section summarizes existing knowledge and puts the current U.S. experience in perspective by offering first a historical view and then an international view. The second explores the reasons for wealth transfers and how givers select their beneficiaries. The contributors consider whether bequests are left by accident or on purpose, how people decide between philanthropic organizations and family, and who gets the bequest within a family. In the third section, the discussion shifts from the inner workings of the household to external factors that affect bequests—namely, taxes and benefits. The final section looks at the impact of wealth transfers on the amount of aggregate saving and capital accumulation and on the distribution of wealth among households.The contributors conclude that wealth transfers are big and important. Understanding how people make their consumption, saving, and bequest decisions is crucial for predicting how people will respond to major changes, such as the plan to phase out the estate tax.Contributors include Andrew Abel (Wharton School), James Andreoni (University of Wisconsin), Theodore Bergstrom (University of California), Jeffrey R. Brown (John F. Kennedy School of Government, National Bureau of Economic Research), Charles Clotfelter (Duke University), Donald Cox (Boston College), J. Bradford DeLong (University of California), Peter Diamond (MIT), Amy Finkelstein (National Bureau of Economic Research), William Gale (Brookings Institution), Jonathan Gruber (MIT), John J. Havens (Social Welfare Research Institute, Boston College), Michael D. Hurd (RAND), Wojciech Kopczuk (University of British Columbia), Laurence J. Kotlikoff (Boston University), John Laitner (University of Michigan), Ray D. Madoff (Boston College Law School), Kathleen McGarry (University of California, National Bureau of Economic Research), Olivia S. Mitchell (Wharton School), Alicia H. Munnell (Center for Retirement Research, Boston College), Peter Orszag (Brookings Institution), Pierre Pestieau (University of Liège, CEPR), James Poterba (MIT), Samara Potter (Brookings Institution), Paul G. Schervish (Social Welfare Research Institute, Boston College), John Karl Scholz (University of Wisconsin), Jonathan S. Skinner (Dartmouth College, National Bureau of Economic Research), Joel Slemrod (University of Michigan), Mauricio Soto (Center for Retirement Research, Boston College), Annika Sundén (Center for Retirement Research, Boston College), Catherine Taylor (Center for Retirement Research, Boston College), and Edward N. Wolff (New York University).