Do Good Kids Finish First?: Characterizing the Bequest Motive in Mexico

Douglas McKee, University of Pennsylvania

While bequests play a central role in economic models of saving and account for a large fraction of the wealth transferred between generations, there is little consensus on why people leave assets when they die or how they decide their distribution. This paper tests the major bequest motive theories directly using a uniquely appropriate longitudinal data set (the Mexican Health and Aging Study) that includes a population-representative sample of bequests in Mexico. I compare child characteristics and care-giving behavior in the 2001 wave of the survey to the observed bequests of parents who die before the 2003 wave. Preliminary results show that children who provide support to parents and have more frequent contact with them were significantly more likely to receive a higher bequest than their siblings. This provides strong support for Bernheim's theory that parents use their bequest strategically to induce children to provide services.