Wealth transfer receipt and later life wealth

Wealth ownership is highly concentrated in the U.S. and this inequality may be reproduced in subsequent generations through wealth transfers. Yet we do not know how households respond to the receipt of a wealth transfer and whether time amplifies the initial benefit of a wealth transfer. Using the Survey of Consumer Finances, we test whether wealth transfer recipients gain an advantage that cumulates with time. We find that the positive association between transfer amount and present net worth weakens as time elapsed since transfer receipt increases. The larger the wealth transfer, the more its association with net worth is diminished by time since transfer receipt. Though wealth transfers provide recipients with a significant initial advantage, households appear to adapt to wealth transfer receipt by some combination of reduced savings and increased consumption. We demonstrate an association between receiving a larger wealth transfer and one type of increased consumption, gift-giving.     

Measures and meaning in comparisons of wealth equlality

How communities distribute wealth is one aspect for judging the performance of economic systems. Many inequality measures exist. Precentiles, Gini coefficients, and statistical pattern measures each rest on different concepts about what equality and inequality mean. Wealth distribution data from 55 communities are compared relative to Gini coefficient, kurtosis, and coefficient of variation. These data show no community with perfect equality. Most communities have some inequality. The general pattern is for wealth inequality to increase with the development of market and mechanized industrial economies.     

Changes in cohort wealth over a generation

Empirical computation of expected wealth is hampered by two problems: mortality risks vary in the population and over time; and observation of net estates for most cohorts is truncated, as some individuals in a cohort survive the calendar date on which observation is terminated. These two problems are solved in estimating cohort wealth for a sample of Wisconsin taxpayers. Hazard rate models of differential occupational mortality risks were estimated from the occupational information on the tax records. Values of net estate are simulated for individuals in each birth cohort who survived. Survivors have characteristics that imply greater wealth holdings than the deceased in every birth year covered by the study (1890-1924). Because of this, estimates of wealth-age relationships produced by the estate multiplier method for any given year will have a serious downward bias. Longitudinal data imply that dissaving does not occur after age 65.     

The wealth of nations revisited: Income and quality of life

Does economic prosperity enhance the quality of human life? Across 101 nations, 32 indices were analyzed that reflect a representative sample of universal human values (e.g., happiness, social order, and social justice). Wealth correlated significantly with 26 of the 32 indices, indicating a higher QOL in wealthier nations. Only suicide and CO₂ emissions were worse in wealthier societies. Basic physical needs were met early in economic development, whereas advanced scientific work occurred only when basic physical needs were fulfilled for almost all people in the society. Limitations of the conclusions are discussed.     

Get a job and keep it! High school employment and adult wealth accumulation

Wealth inequality receives substantial scholarly attention, but mounting evidence suggests that childhood and adolescent traits and experiences contribute to financial disparities in the United States. This study examines the relationship between adolescent labor force participation and adult wealth accumulation. I argue that employed high school students gain practical life skills, abilities, and knowledge from work experience and business exposure that shape investment decisions and affect overall net worth. I use the National Longitudinal Survey of Youth, 1979 cohort, to empirically explore this idea. This study extends the wealth literature by identifying adolescent employment as an important mechanism that improves adult net worth and financial well-being.     

The gender wealth gap:structural and material constraints and implications for later life

Wealth is an important measure of economic well-being, because while income captures the current state of inequality, wealth has the potential for examining accumulated and historically structured inequality. This presentation documents the extent of gender inequality in wealth for Canadian women and men aged 45 and older. The analysis uses data from the 1999 Canadian Survey of Financial Security, a large nationally representative survey of household wealth in Canada. Wealth is measured by total net worth as measured by total assets minus debt. We test two general hypotheses to account for gender differences in wealth. The differential exposure hypothesis suggests that women report less wealth accumulation because of their reduced access to the material and social conditions of life that foster economic security. The differential vulnerability hypothesis suggests that women report lower levels of wealth because they receive differential returns to material and social conditions of their lives. Support is found for both hypotheses. Much of the gender differences in wealth can be explained by the gendering of work and family roles that restricts women's ability to build up assets over the life course. But beyond this, there are significant gender interaction effects that indicate that women are further penalized by their returns to participation in family life, their health and where they live. When women do work, net of other factors, they are better able to accumulate wealth than their male counterparts.     

Housing and wealth inequality: Racial-ethnic differences in home equity in the United States

In our study, we took a first step toward broadening our understanding of the sources of both housing and wealth inequality by studying differences in housing equity among blacks, Hispanics, Asians, and non-Hispanic whites in the United States. Using data from the American Housing Survey, we found substantial and significant gaps in housing equity for blacks and Hispanics (but not for Asians) compared with whites, even after we controlled for a wide range of locational, life-cycle, socioeconomic, family, immigrant, and mortgage characteristics. Furthermore, the payoffs to many factors are notably weaker for minority than for white households. This finding is especially consistent across groups for the effects of age, socioeconomic status, and housing-market value. Blacks and Hispanics also uniformly receive less benefit from mortgage and housing characteristics than do whites. These findings lend credence to the burgeoning stratification perspective on wealth and housing inequality that acknowledges the importance of broader social and institutional processes of racial-ethnic stratification that advantage some groups, whites in this case, over others.     

Parental wealth and children's outcomes over the life-course in Brazil: A propensity score matching analysis

Parental wealth – as distinct from income, education and other parental socioeconomic resources – may play a large role in children's socioeconomic outcomes, particularly in developing countries, characterized by economic volatility, a weak social safety net and limited access to credit. Using a propensity score matching approach, we examine the influence of parental wealth on adult children's schooling, school quality, occupational status, consumption level, and wealth holdings in Brazil. Findings suggest a substantial effect of parental wealth on all these outcomes, with a positive effect of even modest levels of wealth. The effect of parental wealth on occupational status is largely mediated by parental investment in more and better education for children. In contrast, the effect on children's consumption and wealth is largely unmediated by labor market resources and rewards, a pattern that is more pronounced for sons than for daughters. This suggests direct parental financial assistance. Sensitivity analysis indicates that hidden bias emerging from unobserved confounders should have to be unlikely large to question inference of a causal influence of high levels of parental wealth, although the influence of low levels of wealth may be more susceptible to hidden bias.     

Health responses to a wealth shock: evidence from a Swedish tax reform

This paper makes two contributions to the literature on the effects of wealth on health. First, it deals with reverse causality and omitted variable bias by exploiting exogenous variation in inherited wealth generated by the repeal of the Swedish inheritance tax. Second, it analyzes responses in health outcomes through the use of administrative registers. The results show that increased wealth has limited short to medium run impacts on objective adult health. This is in line with what has previously been reported in the literature.     

A longitudinal analysis of the impact of health shocks on the wealth of elders

We investigate the impact of health shocks on wealth, using all four waves of the Health and Retirement Study, and estimate not only the short-term effect but also the long-term effect of health shocks on wealth of the elderly. We find that new health events lower wealth in elders during the period in which such health shocks occur, but the impact tends to disappear over time. We also find that health shocks result in greater wealth depletion when they occur later in life. Together with existing health problems, the overall impact of health problems on wealth increases over time.

Inheritance, land, and capital mobility linked to labour mobility

This paper presents a two-country migration model, following Galor (1986), in which the world population consists of two types individuals. Individuals with a high (low) degree of altruism give to their children a high (low) level of bequest. Production uses three inputs: immobile land, mobile labour, and capital. Capital mobility is linked to labour mobility since individuals move with their inheritance. The model shows that countries are homothetic in the post-migration equilibrium with equal factor prices and equal densities of population. Migration flows are bilateral and the number of each type of migrants is uniquely determined. In some cases, migration leads to a Pareto improvement in both countries. Received: 8 July 1999/Accepted: 7 April 2000     

The impact of taxation on the distribution of wealth in an economy with changing population

The paper investigates into the determinants of the personal distribution of income and wealth. In an overlapping generations model all individuals are assumed to be identical except for their inherited wealth. Since life time is random the bequest of an individual and thus the inherited stock of capital of its children are stochastic variables. Taxation and social security contributions affect life cycle savings, bequests, and, eventually, the distribution of income and wealth in the society. It is shown that, in general, higher tax rates reduce distributive inequality as long as the rate of interest is exogenously given. In steady state, however, where the rate of interest is determined endogenously, increasing taxation and higher social security payments both diminish the capital labor ratio so that the rate of interest rises. If this interest effect is strong enough then it may outbalance the tendency toward more equality because higher interest rates enhance initial differences in the distribution of both income and wealth and, eventually, the inequality in the distribution of income and wealth in the society.     

Household composition and optimal commodity taxes

This paper investigates conditions under which demographic variables will have no impact on commodity taxes. We allow nonlinear and nonseparable preferences, a general demographic demand procedure, and a demogrant scheme linked to the number of children. Formulae for demographic revision of tax estimates are presented in a form that can be easily applied, and the only marginal data requirement is the number of children in the household. The paper extends an earlier exercise (Ray 1988) in avoiding the need for equivalence scales, and in using a demogrant scheme that is consistent with current practice in several European countries. The study confirms the robustness of the earlier discussion to the demogrant scheme adopted.I acknowledge, with thanks, the comments of two anonymous referees, but retain responsibility for errors that may remain.     

Return migration and metropolitan-nonmetropolitan population composition

This paper examines the extent to which female "return migrants" to Puerto Rico return to their area of birth or to a different area, thereby contributing to a redistribution of the island's population, and the extent to which those who do return to their area of birth have different socioeconomic characteristics than those who return to a different area.     

Social background composition and educational growth

This paper examines the impact of intercohort changes in social background composition on changes in grade progression rates at selected schooling levels. It presents formal arguments that the relative and absolute effects of background composition on grade progression rates should decline over levels of schooling, and using data for white males born beteen 1907 and 1951, offers empirical support for these arguments. Whereas twentieth century increases in average educational attainment are primarily due to increases in grade progression rates at the elementary and secondary levels, future growth must occur through increases in transition rates beyond high school, given the near universality of high school graduation for cohorts born at midcentury. Our analysis shows that postsecondary progression rates are much less responsive to changes in family background composition than rates in the schooling process. Despite intercohort changes in background composition that are increasingly favorable to educational attainment, future educational growth may be slower than past growth because compositional effects on average attainment will be through progression rates where the effects are weak.     

Household composition and extended kinship in Taiwan

Abstract The extended family has been an essential part of Chinese society, both in cultural ideal and social reality.(1) The traditional Chinese ideal has been for co-residence of parents with their married sons and their families in a large, joint-stem household unit. The reality, in Taiwan and elsewhere, has deviated from the ideal in several ways. First, for any given young couple, relatives necessary for a joint-stem family may not be available at one or another stage of the family life cycle. Secondly, even when all the necessary relatives are available, the emphasis has been on the vertical filial tie, rather than the horizontal fraternal tie, so the predominant fact has been co-residence of parents with a married son. Married brothers usually-do not live together and, if they do, it is usually when the parent is or has been in the same unit.     

Sibling composition and selective gender-based survival bias

We examine the relationship between the gender composition of surviving older siblings and gender differences in children’s survival using data from the Third National Family and Health Survey (2005–2006) in India. We address the possibility of unobserved mother-specific heterogeneity and explore the role of household wealth, parental education, and urban residence in strengthening or weakening selective gender-based survival bias. We find that daughters’ survival disadvantage increases in the number of older sisters and decreases in the number of older brothers they have. The opposite is true for sons’ survival disadvantage. Household wealth, parental education, and urban residence are all found to intensify selective survival bias among daughters and sons.     

The role of non-timber forest products in household coping strategies in South Africa: the influence of household wealth and gender

The prevalence and ranking of non-timber forest products (NTFPs) as safety-nets has been well discussed, but rarely quantified. We report on group discussions and household interviews in two South African villages to assess the frequency and nature of shocks and stresses over a 2-year period and the coping strategies employed, stratified by household wealth and gender of the de jure household head. Overall, kinship was the most widely adopted coping strategy, and NTFPs were the fifth most prevalent (employed by 70% of households). There were relatively few differences in the nature of shocks or responses between male- and female-headed households. Wealth influenced the experience of shocks or stresses as well as responses. Poorer households have fewer options with the increased use or sale of NTFPs being the second most commonly adopted strategy. Increased use and sale of NTFPs is a common manifestation of the safety-net function. To reconcile long-term economic development and biodiversity conservation, it is important to understand people??s use of natural resources and the factors that affect this use, including their responses to shocks and stresses.     

Influences of household structure and composition on breast-feeding

Researchers applied longitudinal data on 2884 women who were at least 6 months pregnant between May 1983-April 1984 and living in the Cebu metropolitan area, the Philippines to examine assumptions which may explain the association between lower breast feeding levels and dwindling social support for mothers who breast feed in urban areas. Extended family households were much more common in urban areas than rural areas (46.3% vs. 27.5%). This finding did not support the 3rd assumption of falling extended family patterns with urbanization. Further as the levels of complexity and extension of the household rose so did infant care support regardless of location. For example, the number of hours of help with infant care for mothers in nuclear families in urban areas was 1.23 which climbed from 2.53 for horizontal extended families to 2.9 for vertical extended families and to 3.09 for horizontal and vertical extended families. This result supported the 2nd assumption of much more social support in extended families than nuclear families. Yet social support did not translate into promotion of breast feeding--the 1st assumption. Mothers in horizontally extended families had a lower likelihood of breast feeding than those in nuclear families. Further only adult female relatives of the same generation as the mother has a negative influence on breast feeding in urban mothers, but not rural mothers. In fact, female children of at least 7 years old, female servants, and yayas all negatively affect breast feeding in urban mothers, but not rural mothers. In rural households, young female relatives (at least 7 years old) significantly increased the probability of breast feeding whereas young male relatives decreased the probability.