Bequest and Inheritance in Nuclear Families and Joint Families

Abstract

Questions of income and wealth distribution have been increasingly brought into public attention in recent years. There now exists a large body of theoretical and empirical work concerning the measurement and generation of income and wealth inequality, although empirical work has been hampered by lack of good, usable wealth data which can be traced back several generations for the same family. The overwhelming bulk of both theoretical and empirical research in this area has been concerned with nuclear families. Here, the amount transferred across generations has been shown to depend on the distribution of length of life, the degree of capital market imperfection, optimizing behaviour and bequest motives, etc.' But there are many societies at present times (and the majority of societies in the past) where non-nuclear or joint family arrangement is found. While most models allow only for property to pass from parents to children, from father to sons or to the eldest son, historical accounts of inheritance/bequest patterns present a bewildering variety of rules in different family arrangements (Goody et al., 1976). It seems worthwhile therefore to contrast the implications of the nuclear family arrangement with a joint family one, but at the same time to allow for the important factors dealt with in some earlier studies, such as uncertainty concerning length of life, optimizing behaviour and bequest motives, etc. When we do this we discover interesting differences in the arrangements about bequest/inheritance patterns, in the possibility for dynastic accumulation, and in the choice of bequest transfer system. In the next section, the basic model is outlined in the context of a nuclear family. We use the Samuelson (1958) overlapping-generations framework, as this combines finite individual life with infinite horizons for social arrangements. In Section II the nuclear family model is analysed, and Section III looks at the joint family model. Results of the two models are contrasted, and results of Section III negate some of those of Section II. We therefore hope to have brought out the importance of the alignment of family arrangement and uncertain death in determining the pattern of bequests. The last section concludes with a summary of the results and remarks about possible extensions.