The Contribution of Intergenerational Transfers to Total Wealth: A Reply

Laurence J. Kotlikoff, Lawrence H. Summers

NBER Working Paper No. 1827 (Also Reprint No. r1093)
Issued in February 1986
NBER Program(s):Public Economics, Aging

This paper responds to Franco Modigliani's recent critique of our 1981 paper on the importance of intergenerational transfers for U.S. savings. Modigliani's paper is the latest salvo in a long running debate over the importance of intergenerational transfers in explaining savings behavior. While Modigliani corrects an algebraic error of minor consequences in our earlier paper, its correction does not, in our view, call into question the fundamental conclusion that life cycle considerations can account for only a small part of aggregate capital accumulation. Inevitably, it is possible to challenge aspects of any complex empirical calculation. Modigliani's attacks seem to us incorrect in most cases and generally fail to address our primary method of determining the importance of intergenerational transfers. Many considerations at least as important as those raised by Modigilani suggest that our method produces an overestimate of the importance of life cycle wealth.

download in pdf format
   (176 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1827

Published: Kotlikoff, Laurence J. and Lawrence H. Summers. "The Contribution of Intergenerational Transfers to Total Wealth": A Reply," Modelling the Accumulation and Distribution of Wealth, eds. D.Kessler and A. Masson, Oxford Press, 1987.

Users who downloaded this paper also downloaded* these:
Kotlikoff w2237 Intergenerational Transfers and Savings
Kotlikoff and Summers w0445 The Role of Intergenerational Transfers in Aggregate Capital Accumulation
Brown and Weisbenner Intergenerational Transfers and Savings Behavior
Becker and Tomes Human Capital and the Rise and Fall of Families
Stevenson and Wolfers w14282 Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us