transfer resources to their children in two ways: First, through education investments, which have heterogeneous and stochastic … returns for children, and, second, through financial bequests, which yield a safe, uniform return. Each generation … unrestricted policies and show that, if education is highly complementary to children's ability, it is optimal to distort parents …

This paper examines the bequest\gift behavior of altruistic parents who do not know their children's abilities and … cannot observe their children's work effort. Parents are likely to respond to this information problem by making larger … bequests to higher earning children and by using their transfers implicitly either to tax at the margin low earning children or …

In the standard analysis of an overlapping generations economy with gifts from children to parents, each generation … inefficient. In reality, however, parents precede children in time and realize that children will respond to higher parental …

. Intergenerational wealth immobility, also considered here, is primarily determined by the inheritance of skills from one's parents and … the magnification of the impact of this inheritance by marital sorting …