Dissertations, Theses, and Capstone Projects

Date of Degree

2-2026

Document Type

Doctoral Dissertation

Degree Name

Doctor of Philosophy

Program

Economics

Advisor

Miles Corak

Committee Members

Wim P. Vijverberg

Timothy J. Goodspeed

Subject Categories

American Politics | Behavioral Economics | Economic History | Economic Policy | Labor Economics | Other Economics | Political Economy | Public Economics | Regional Economics

Keywords

inheritance, estate tax, household finances, household wealth, labor supply, homeownership, household consumption, state estate tax

Abstract

An increasing proportion of wealth in the United States is owned by adults over the age of 70. As the so-called Baby Boomer generation ages, a sizeable wealth transfer is likely to occur from this generation to younger age groups. The expected impacts of wealth transfers (and inheritances in particular) at all levels are thus a subject of interest. At the level of the federal government, estate and inheritance taxes in the U.S. have generally been rolled back over time alongside increases in wealth inequality and ballooning debt. However, the specific policy levers used in this process, their revenue implications, and several nuances at the state level have not been thoroughly explored. At the household level, the impact of inheritances is not well-understood. Studies have taken piecemeal approaches and assessed the impacts of inheritances on labor supply and wealth-related outcomes, and the effects are not large enough to explain what households do with their inheritances. Meanwhile, changes in expenditure remain underexplored — existing studies are insufficiently rigorous in establishing causality, conflate inheritances and gifts, and do not broadly assess the relative impact on wealth-based outcomes (such as home ownership and non-home wealth) and expenditures. The three essays of this dissertation examine each of these aspects in turn. The first is an overview of the history and revenue implications of estate and inheritance taxes at the federal and state levels. The results show that the marital deduction plays a more significant role in reducing tax liability as compared to tax credits, and that the exemption threshold has reduced estate tax revenues more than the top marginal tax rate. The second essay replicates the earliest of a handful of papers that evaluated the impact of inheritance on household expenditure. Findings suggest that while the effects on other outcomes could not be replicated, the influence of inheritances on food expenditure, while small, is much more robust. The third essay takes a rigorous and broad approach in establishing a causal link between inheritances and household expenditures, home ownership, and wealth. The results show that inheritances increase expenditures on durable goods such as home repairs and furnishings.

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