Paul L. Menchik

Volunteer labor supply

Abstract We model the supply of volunteer labor, which received an explicit wage of zero. Quantitatively important, it constituted over 5 percent of the entire labor supply in the United States in 1980. Both consumption and investment models are considered - the former positing volunteering as an ordinary consumer good, while the latter posits it as a means of obtaining on-the-job experience. Empirical estimation, based on survey data, discloses statistically significant effects of price and income variables on the supply of volunteer labor.

Economic status as a determinant of mortality among black and white older men: does poverty kill?

The evidence presented in this paper shows that differential mortality by economic status is strongly present in the United States today, and that this relationship is monotonic, with mens death rates being lower among the wealthier. Also, the greater the number of spells of poverty, the higher the death rate. These data suggest that differential mortality rates by economic status are being confused with the well-known ethnic differences in mortality. An implication of this paper, therefore, is that ethnic differences in mortality are, in large part, a consequence of poverty or permanent low income, as opposed to genotype. Consequently, it may be just as valid, or even more so, to publish mortality tables by income as by race. A policy implication of this paper is that the redistributive effects of longevity-based transfer systems, such as social security (public pensions), may be less ‘progressive’ than has been assumed, since would-be poorer recipients are either less likely to live long enough to coll...

Economics of Inheritance

Economists are concerned with inheritance at two levels: the economywide level and the household level. At the economywide level, the principal focus of economic research has been to determine the proportion of total wealth in the economy that was either received as an inheritance or accumulated with the intent to bequeath. At the household level, the principal focus is on determining the behavioral motivation for making bequests. Our survey focuses on both of these aspects of inheritance by summarizing the frameworks through which economists have analyzed inheritances, assessing the empirical evidence accumulated, and highlighting the policy relevance and possible consequences of these findings. In the next section, we discuss in greater detail how economists’ concept of inheritance may differ from the legal or commonly held definitions of inheritance.

Changes in Cohort Wealth Over a Generation

Empirical computation of expected wealth is hampered by two problems: mortality risks vary in the population and over time; and observation of net estates for most cohorts is truncated, as some individuals in a cohort survive the calendar date on which observation is terminated. These two problems are solved in estimating cohort wealth for a sample of Wisconsin taxpayers. Hazard rate models of differential occupational mortality risks were estimated from the occupational information on the tax records. Values of net estate are simulated for individuals in each birth cohort who survived. Survivors have characteristics that imply greater wealth holdings than the deceased in every birth year covered by the study (1890–1924). Because of this, estimates of wealth-age relationships produced by the estate multiplier method for any given year will have a serious downward bias. Longitudinal data imply that dissaving does not occur after age 65.

Saving behavior of older households: Rate-of-return, precautionary and inheritance effects

Abstract We estimate a model of household saving behavior using data from a panel of men nearing retirement age. We seek and find statistically significant rate-of-return, precautionary and intergenerational-transfer effects embedded within a retirement-consumption life-cycle model.