The Joy of Giving or Assisted Living? Using Strategic Surveys to Separate Bequest and Precautionary Motives / John Ameriks, Andrew Caplin, Steven Laufer, Stijn Van Nieuwerburgh.

Format:

Book

Author/Creator:

Ameriks, John.

Contributor:

National Bureau of Economic Research.

Caplin, Andrew.

Laufer, Steven.

Van Nieuwerburgh, Stijn.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13105.

NBER working paper series no. w13105

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

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:

Print version record

May 2007.