Expected Bequests and Current Wealth of Older Households

Abstract

We use the subjective probabilities of bequests to be given in the future and current asset holdings, as reported in three household surveys (HRS, ELSA, and SHARE) covering thirteen countries, in order to assess whether, and to what extent, households plan to decumulate assets in old age. We model intended bequests as a function of household demographic and economic characteristics, and estimate their expected value using quasi-maximum likelihood methods. By comparing the current wealth holdings with the expected intended bequests we compute the pattern of future saving by households, and assess its cross-country variability with respect to housing wealth.