Do gifts and bequests facilitate homeownership and firm creation?

Bertrand GARBINTI

Issues about wealth distribution between generations are of great political concern. In France, researchers have emphatized the fact that wealth is mainly hold by the elder and that young generations inherit later and later. Fiscal measures aiming at mitigating this generational gap have been voted to create incentives for donations. I study here the impact of intergenerational transmissions on two components of households behavior: do they lead to a greater propensity to purchase a primary residence and to create or buy out a firm? Using “Patrimoine” Survey 2009-2010, I show that households who received a gift or a bequest buy more often their primary residence. For the creation or the buyout of a firm, gifts also exhibit a significant effect while bequests do not. Donations received before 35 have a stronger effect on these two outcomes which tends to suggest that early gifts are the most useful ones. The link between gifts and home-ownership is also found stronger since the rise in the real estate prices that occurred in the 2000's. I use a discrete time duration model, complemented with a “split population” one in order to take into account heterogeneity in household behavior. Causal effect of donations is also assessed with an instrumental variable method. The number of siblings is used as an instrument and enables to evaluate a local effect on the population of people born from a wealthy family. On this subpopulation, the causal effect is found stronger than the ones computed thank to other models.

Documents de travail
No G2014/02
Paru le : 03/03/2014