Bequest motives: a comparison of Sweden and the United States

This paper reviews four well-known theoretical models of private bequest behavior, notes their differing implications for public policy, and discusses a way of empirically discriminating among them. Then it implements the test with micro data from Sweden (LLS) and the U.S. (PSID). The so-called altruistic (or dynastic) model, which, among the four models, has perhaps the most wide-ranging implications for policy, receives some support. The sign pattern is as the model predicts, while the magnitude is much smaller than the altruistic theory implies. There is evidence of a potential complication due to a dependence of children's education on parents' financial status in the case of the U.S. (C) 2001 Elsevier Science B.V. All rights reserved.