Actual and Anticipated Inheritance Receipts

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Using data from the Health and Retirement Study, the project compares actual inheritances received during the period 1994 to 2004 with the amounts that, in 1994, households anticipated receiving within ten years. The authors find little evidence of systematic forecasting errors. The factors affecting inheritance receipt also affect expectation formation. Although the distribution of inheritances is highly skewed, they are generally modest in amount and uncorrelated with lifetime income, and therefore have almost no effect on various measures of inequality. The authors find no evidence that households anticipating receipt of an inheritance save less than otherwise similar households, although this could reflect unobserved heterogeneity in tastes for saving.