 Altruism, Education and U.S. Wealth InequalityNo 423, 2006 Meeting Papers from Society for Economic Dynamics Abstract: This paper examines the extent to which intergenerational links through transfers of wealth and investment in human capital might help in accounting for the wealth inequality observed in U.S. data. We examine an overlapping-generations heterogeneous agents economy with idiosyncratic risk and altruistic parents. We extend previous models in two main dimensions. First, wealth transfers are derived on the basis of altruism rather than `joy-of-giving’ as assumed in previous computable OLG models. Secondly, we assume that parents can transfer not only wealth (through inter vivos transfers and bequests) but also human capital through education. We find that these features help significantly for accounting for the large inequality in wealth relative to earnings observed in the U.S. In particular, it is shown that altruism helps to explain why the distribution of wealth is more concentrated than the distribution of income, why bequests appear to be a luxury good and why transfer wealth is so high in relation to total wealth Keywords: intergenerational altruism; overlapping generations; human capital (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:red:sed006:423 Access Statistics for this paper More papers in 2006 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC. |
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