ESRI Discussion Paper Series No.333
The Intra-Family Division of Bequests and Bequest Motives: Empirical Evidence from a Survey on Japanese Households

Junya Hamaaki
Associate Professor, Institute of Comparative Economic Studies, Hosei University, Japan
Masahiro Hori
Senior Research Fellow, Economic and Social Research Institute, Cabinet Office, Japan
Keiko Murata
Professor, Graduate School of Social Sciences, Tokyo Metropolitan University, Japan

Abstract

The division of bequests among family members differs sharply between Japan and the United States. Whereas in the United States, bequests tend to be divided equally among decedents’ children, they tend to be divided unequally in Japan. This paper first tries to answer why this is this case. We start by arguing that certain legal and institutional aspects that lead to equal bequests in the United States are not present in Japan. We then investigate patterns of bequest division in Japan to understand parental bequest motives. In particular, we compare the division of bequests in primary and secondary inheritances to examine parental motives and the role of traditional family values in Japan. While in the case of both “primary” and “secondary” inheritances (referring to inheritances where the first parent has died and inheritances in which the second parent has died, respectively) the patterns of bequest division in Japan look generally consistent with a variety of parental bequest motives proposed in the literature, the role of these motives, especially of the dynastic and strategic motives, is more prominent in primary inheritances, in which the surviving spouse has the opportunity to express his/her intentions. However, Japanese parents, contrary to predictions of the altruism model, appear not to bequeath more to economically disadvantaged children.


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  2. page1
    Abstract
  3. page2
    1. Introduction
  4. page4
    2. Institutional differences between Japan and the United States
    1. page4
      2.1 Wills and will substitutes
    2. page5
      2.2 Inheritance, estate, and gift tax laws
    3. page7
      2.3 Family system
    4. page8
      2.4 A hypothetical explanation for the contrasting patterns
  5. page8
    3. Data description
    1. page8
      3.1 Data source
    2. page9
      3.2 Descriptive statistics
  6. page10
    4. Empirical strategy
    1. page10
      4.1 Outline
    2. page13
      4.2 Regression specification
  7. page16
    5. Empirical results
    1. page17
      5.1 Determinants of bequest division in primary inheritances
    2. page19
      5.2 Determinants of bequest division in secondary inheritances
    3. page20
      5.3 Further evidence
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    6. Conclusion
  9. page23
    References
  10. page27
    Figure 1. Bequest shares by number of siblings and their deviation from the statutory shares
  11. page28
    Table
    1. page28
      Table 1. Bequests by size
    2. page28
      Table 2. Descriptive statistics of bequests (in million yen)
    3. page29
      Table 3. Descriptive statistics
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      Table 4. Determinants of the deviation from the statutory share: Primary inheritances
    5. page31
      Table 5. Determinants of the deviation from the statutory share: Secondary inheritances
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      Table 6. Share of the decedents dying testate (in percent): Primary vs. secondary inheritances
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      Table 7. Probit estimation results for the probability of a will being left
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      Table 8. Ratio of heirs who report their share was different from the statutory share (in percent)
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      Table 9. Merits of dividing bequests differently from statutory shares
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    Appendix
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      Appendix I
    2. page36
      Appendix II.
    3. page37
      Appendix Table 1. Determinants of the deviation from the statutory share: Surviving parent
    4. page38
      Appendix Table 2. Determinants of the deviation from the statutory share: Secondary inheritances
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