Large Bequests Research Articles

Financial transfers from parents to adult children

This paper uses 1996–2014 longitudinal HRS data to establish the relative importance of intervivos transfers, bequests and coresidency in the United States. We find that when computing the relative importance of intervivos transfers versus bequests, the aggregate perspective that pools all data into a single cross-section is very different than the parent-level longitudinal perspective, highlighting the special value of panel data. This difference reflects the fact that large bequests are highly concentrated and play an influential role at the aggregate level, while at the micro parent-level, intervivos transfers constitute the main form of financial support for most parents. Regarding coresidency, we find that although older children and parents tend to coreside when the child is helping the parent, coresidency tends to be more prevalent among poorer, younger parents and their children. Children who ever coreside with parents also receive larger total intervivos transfers.

Unboxed: Transgender in a Gay Museum?

<i>Unboxed: Transgender in a Gay Museum?</i>

Optimal Bequests Taxation in the Steady State

We consider an infinite-horizon economy populated by two types of individuals, some individuals being more productive than others. Individuals live one period and are altruistic toward their children. Assuming that the allocation received by a given individual depends only on his type and the one of his parent, we first determine the second-best steady state allocation and then study the optimal bequest and labor income tax functions, that are assumed to be separable. We first show that the second-best is not implementable with such tax schedules. We then demonstrate that it may be desirable to tax large bequests (and to subsidize low bequests), provided that individuals are sufficiently altruistic and the less productive individuals are sufficiently numerous. The taxation of large bequests is however not always part of the optimal solution. A numerical example suggests that no taxation of bequests is needed under moderate altruism, while large bequests should be subsidized when individuals are poorly altruistic.

Halliday, Daniel. The Inheritance of Wealth: Justice, Equality, and the Right to Bequeath. Oxford: Oxford University Press, 2018. Pp. 256. $42.95 (cloth).

Halliday, Daniel. <i>The Inheritance of Wealth: Justice, Equality, and the Right to Bequeath</i>. Oxford: Oxford University Press, 2018. Pp. 256. $42.95 (cloth).

Replacing the Failure Rate: A Downside Risk Perspective

The evaluation of retirement strategies is typically based on the failure rate, although some alternatives have been proposed recently, such as risk-adjusted success (RAS), which aims to capture not just the failure but also the success of the strategies evaluated. The main shortcoming of RAS is that it measures risk with the standard deviation, which penalizes strategies that leave large bequests. The variable proposed here, downside risk-adjusted success (D-RAS), addresses this shortcoming by taking a downside risk perspective, measuring risk with the semideviation, and therefore with volatility below a chosen benchmark. This modification leads to the selection of more plausible strategies than those selected by both the failure rate and RAS.

Practical Applications of Replacing the Failure Rate: A Downside Risk Perspective

<h3>Practical Applications Summary</h3> In <b>Replacing the Failure Rate: <i>A Downside Risk Perspective</i></b>, published in the Spring 2018 issue of <b><i>The Journal of Retirement</i></b>, <b>Javier Estrada</b> (<b>IESE Business School</b>) suggests a new metric for evaluating asset allocation and withdrawal strategies for retirement planning. He proposes replacing the widely used “failure rate,” with a measure called the “downside risk-adjusted success” ratio (D-RAS). The failure rate indicates the frequency with which a strategy fails to supply a retiree with a sustained stream of withdrawals for his full retirement period (e.g., to age 95). A shortcoming of the failure rate is that it does not distinguish among strategies based on how badly they fail-that is, by the average number of years that they fail to sustain withdrawals during retirement. By contrast, D-RAS reflects the frequency with which a strategy succeeds in providing sustained withdrawals, the average number of shortfall years when the strategy fails, and the downside variability of failure. A key feature of D-RAS is that is focuses only on the downside variability of a strategy’s performance. Unlike other measures, it does not penalize a strategy for producing upside variability (e.g., large bequests at the end of the retirement period). <b>TOPICS:</b>Retirement, risk management, analysis of individual factors/risk premia

Replacing the Failure Rate: A Downside Risk Perspective

The evaluation of retirement strategies is typically based on the failure rate (the rate at which a retiree’s nest egg is exhausted prematurely), although some alternatives have been proposed recently. One of these is risk-adjusted success (RAS), which aims to capture not just the failure but also the success of the strategies evaluated. The main shortcoming of RAS is that it measures risk with the standard deviation, which penalizes strategies that leave large bequests. The variable proposed here, downside risk-adjusted success (D-RAS), addresses this shortcoming by taking a downside risk perspective, measuring risk with the semi-deviation and, therefore, with volatility below a chosen benchmark. This modification leads to the selection of more plausible strategies than those selected by both the failure rate and RAS. <b>TOPICS:</b>Retirement, risk management, analysis of individual factors/risk premia

Following the Money: Cathars, Apostolic Poverty, and the Economy in Languedoc, 1237–1259

Abstract Voluntary poverty was an important element of the apostolic way of life embraced by many Christian religious groups in medieval Europe, both those considered heretical and others that were not. This article shows that the so-called Cathar heretics of Languedoc, however, did not embrace apostolic poverty. In fact, they participated actively in the local economy, even borrowing and lending money on occasion. Using testimony of Cathar supporters contained in thirteenth-century inquisition registers, this article shows that believers made large bequests and contributed both goods and money to the Cathars. These assets were held and managed collectively and used to support the heretical clergy and, at times, believers as well. The article also demonstrates the existence of a network of Cathar practitioners, believers, and supporters through which money was collected, held, and circulated.

Fundraising in American Public Libraries: An Overview

ABSTRACTAmerica’s public libraries have faced changes because of technology’s challenges—but a disruption that’s just as dangerous is the gradual dwindling of the public funding that they have historically relied on. To meet the formidable challenges, librarians will have to go back to their historical “roots.” So-called “public” libraries, after all, were actually founded by large bequests from private donors such as Andrew Carnegie and Samuel Tilden. Modern-day librarians—from Virginia to Montana—that have embraced the crucial work of fundraising have been able to devise imaginative, sometimes Internet-based, solutions to overcoming budget shortfalls. Their stories show us what is possible when an inventive entrepreneurial spirit pervades the library.

BEQUEST RECEIPT AND FAMILY SIZE EFFECTS

This article tests the connection between credit constraints and negative family size effects on child earnings using bequest receipt to signal access to credit markets. The dominant economic model of fertility predicts a negative relationship between family size and child achievement. In the model, limits on borrowing create this “quality‐quantity trade‐off.” This article tests for the relevance of credit constraints using Panel Study of Income Dynamics data to compare family size effects across groups defined by bequest receipt. Contrary to the credit constraints explanation, those receiving large bequests exhibit large family size effects, while those not receiving bequests show little to no effect. (JEL J13, D1, I2)

Mobility, information, and bequest: The “other side” of the equal division puzzle

There is substantial evidence that parental bequests to children are typically equal in the US—a regularity inconsistent with the predictions of standard bequest models. The prior explanation for this puzzle is parents’ desire to signal equal affection given children’s incomplete information of parental preferences. However, parents also have incomplete information regarding children preferences—which has not been considered. Using a strategic bequest framework, we show that when parents have sufficient uncertainty regarding children’s relocation returns, a separating equilibrium where parents reward attentive heirs with larger bequests is precluded. Such uncertainty appears consistent with conditions in the contemporary USA.

The return to Coree: the surgical connection.

Samuel Wilson purchased Coree in 1865. In 1874 he donated 30000 pound sterling to Melbourne University to build the Wilson Hall, used for ceremonial occasions including medical graduation. Samuel McCaughey purchased Coree in 1881. In 1919 he left large bequests used by Sydney University to found the first Chair of Surgery. This was held by Frances Percival Sandes from 1921 to 1928. David McCaughey died of general peritonitis at Coree in 1899, his son Samuel married Una McKellar who was Thomas Dunhill's step-daughter. Thomas Dunhill, pioneer thyroid surgeon, gave the hand of his stepgranddaughter, Unity McCaughey, to Murray Pheils in London in 1941. Roy McCaughey created the McCaughey Institute at Coree in 1945 in memory of his nephew Michael McCaughey who was killed in action in New Guinea. Pioneering work in ovum transfer and in vitro fertilization in sheep was carried out at Coree by Neil Moore from 1959 to 1971. Roy McCaughey left a bequest to the Royal Australasian College of Surgeons in 1972, this was used to endow the Sir Roy McCaughey Scholarship in 1995.

The Vanishing Birth-Rate of Civilization — Death-Rates in Boston and Elsewhere — Termination of the Typhoid Epidemic at Annapolis — Some Large Bequests in Medical Charity — Medical Notes

Editorial from The New England Journal of Medicine — The Vanishing Birth-Rate of Civilization — Death-Rates in Boston and Elsewhere — Termination of the Typhoid Epidemic at Annapolis — Some Large Bequests in Medical Charity — Medical Notes