Discussion Papers,
Statistics Norway, Research Department

Abstract: The Carnegie effect (Holtz-Eakin, Joualfaian and Rosen, 1993) refers to the idea that inherited wealth harms recipient's work efforts, and possesses a key role in the discussion of taxation of intergenerational transfers. However, Carnegie effect estimates are few, reflecting that such effects are hard to trace in data. Most previous studies have relied on data from limited size sample surveys. Here we use information from a rich administrative data set covering the entire Norwegian population, which makes it possible to undertake a detailed examination of the Carnegie effect, including how it varies across groups of recipients. The estimation results show significant reductions in labor supply for recipients of large inheritances, in the range from 7 to 10 percent in the first six years after the transfer. Moreover, we find that the Carnegie effects differ according to the size of the transfer, the age of the recipients, the recipient's eligibility to other transfer programs, and the existence of new heirs in the family chain.

Keywords: inheritance; labor supply; heterogeneous responses

JEL-codes: D10; D80; D91; J22

46 pages, December 2016

Full text files

286151?_ts=158b0cb18d0  

Download statistics

• Statistics Norway, Research Department
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to L Maasø ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:ssb:dispap:853This page generated on 2024-10-30 04:36:30.