(), Eleonora Freddi
() and Øystein Thøgersen
Ingvild Almås: Stockholm University and NHH, Postal: Stockholm University, Stockholm, Sweden
Eleonora Freddi: Stockholm School of Economics, Postal: Stockholm School of Economics, Stockholm, Sweden
Øystein Thøgersen: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Abstract: Particularly high saving rates among the elderly in both rural and urban China call for an investigation of the involved bequest motive. Utilizing unique survey data from a diverse group of Chinese households, we document that the magnitude of the bequest from parent to child is synchronized with the level of personal assistance from child to parent. Moreover, both bequest and assistance are increasing in the parent's income and decreasing in the child's income. Comparing with the prediction from a stylized overlapping generations model, these ndings are consistent with an exchange-based bequest motive. This conclusion has implications for how public policies and transfer schemes may be designed in order to contribute to the government objective of increased private consumption. Our results indicate that an important driver for our result is the housing wealth as part of the bequest.
38 pages, June 27, 2016
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