Although knowledge is rapidly increasing about the facts surrounding the distribution of household wealth and savings behavior, this factual base has not yet been translated into a deeper understanding of the theoretical reasons why people save. The authors studied the role of inheritances and bequests in shaping household decisions of wealth accumulation using new methods of measuring bequests: They examined actual bequests made by individual upon their deaths and compared them with their previously stated intentions. Anticipated bequests were measured in two waves of respondents; the authors studied the reasons for between-wave revisions of the subjective bequest probabilities. They found that increases in the probability of surviving, in increments in household wealth, and in widowing were associated with increases in bequests probabilities, whereas out-of-pocket medical expenses reduced the likelihood of a bequest. They also found that individuals will dissave at advanced old age: Respondents anticipate substantial dissaving before they die.

Originally published in: Themes in the Economics of Aging, 2001, pp. 357-391.

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