The joy of giving or assisted living?
Subtitle: using strategic surveys to separate bequest and precautionary motives
By: John Ameriks ... [et al.]
Contributors: Ameriks, John, 1968-; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13105.; Working paper series (National Bureau of Economic Research) -- working paper no. 13105.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 57
Subjects: Inheritance and succession; Saving and investment; Retirement income -- United States -- Econometric models
Description: Strong bequest motives can explain low retirement spending, but so equally can strong precautionary motives. Given this identification problem, the recent tradition has been largely to ignore bequest motives. We develop a rich model of spending in retirement that allows for both motives, and introduce a "Medicaid aversion" parameter that plays a key role in determining precautionary savings. We implement a "strategic" survey to resolve the identification problem between bequest and precautionary motives. We find that strong bequest motives are too prevalent to be ignored. Moreover, Medicaid aversion is widespread, and helps explain the low spending of many middle class retirees.
Notes: "May 2007"

Includes bibliographical references (p. 34-38).

Also available in PDF from the NBER world wide web site (www.nber.org).