The Carnegie Conjecture: Some Empirical Evidence

Douglas Holtz-Eakin, David Joulfaian, Harvey S. Rosen

NBER Working Paper No. 4118 (Also Reprint No. r1796)
Issued in June 1993
NBER Program(s):   PE   LS

This paper examines tax return-generated data on the labor force behavior of people before and after they receive inheritances. The results are consistent with Andrew Carnegie's century-old assertion that large inheritances decrease a person's labor force participation. For example, a single person who receives an inheritance of over $150,000 is roughly four times more likely to leave the labor force than a person with an inheritance below $25,000. Additional, albeit weaker, evidence suggests that large inheritances depress labor supply, even when participation is unaltered.

(351 K)

(211 K)

Published: Quarterly Journal of Economics, Vol. CVIII, pp. 413-436 (May 1993).

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