Inheritance Expectation and Savings Behavior over Ten Years

Noura E. Insolera, CUNY Institute for Demographic Research (CIDR)

Using data from the Panel Study of Income Dynamics, this research analyzes whether the expectation of an inheritance in the future affects savings behavior. Socioeconomic and demographic characteristics as well as previous inheritances experience are examined. The results show that those who expected an inheritance greater than or equal to 100% of their yearly total family income had significantly less savings regardless of whether the inheritance was ever received. The results also show that receiving an inheritance is associated with increased savings 5 years later, especially when that inheritance was not expected. This analysis also considers what happens to all of these dynamics 10 years later after the period of expectation period expires.