Heterogeneity of the Carnegie Effect

40 Pages Posted: 19 May 2015

See all articles by Erlend E. Bo

Erlend E. Bo

Statistics Norway

Elin Halvorsen

Statistics Norway - Research Department; University of Oslo - Department of Economics

Thor O. Thoresen

Statistics Norway - Research Department; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: May 19, 2015

Abstract

The Carnegie effect (Holtz-Eakin, Joualfaian and Rosen, 1993) refers to the idea that inherited wealth harms recipients’ work efforts, and possesses a key role in the discussion of taxation of intergenerational transfers. However, Carnegie effect estimates are few, reflecting that such effects are hard to trace in data. Most previous studies have relied on data from limited size sample surveys. Here we use information from a rich administrative data set (for the whole Norwegian population), which makes it possible to undertake a detailed examination of the Carnegie effect, including how it varies across groups of recipients. We find that Carnegie effects differ according to the size of the transfer, the age of the recipients, the recipients’ eligibility to other transfer programmes, and the existence of new heirs (children) in the family chain.

Keywords: inheritance, labor supply, heterogeneous responses

JEL Classification: D100, D800, D910, J220

Suggested Citation

Bo, Erlend E. and Halvorsen, Elin and Thoresen, Thor O., Heterogeneity of the Carnegie Effect (May 19, 2015). CESifo Working Paper Series No. 5339, Available at SSRN: https://ssrn.com/abstract=2607904 or http://dx.doi.org/10.2139/ssrn.2607904

Erlend E. Bo

Statistics Norway ( email )

N-0033 Oslo
Norway

HOME PAGE: http://https://sites.google.com/site/erlendebo/

Elin Halvorsen

Statistics Norway - Research Department ( email )

Akersveien 26
Postboks 2633 St. Hanshaugen
Oslo, Oslo 0131
Norway

University of Oslo - Department of Economics

Norway

Thor O. Thoresen (Contact Author)

Statistics Norway - Research Department ( email )

Kongens Gt. 6
PO Box 8131 Dep
N-0033 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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