In the United States, more than two‐thirds of decedents with multichild families divide their estates exactly equally among their children. In contrast, gifts given before death are usually unequal. These findings challenge the validity of existing theories regarding the determination of intergenerational transfers. In this paper, we develop a theory that accounts for this puzzle based on the notion that the division of bequests provides a signal about a parent’s altruistic preferences. The theory can also explain the norm of unigeniture, which prevails in other societies.

The Mismatch Between Life Insurance Holdings and Financial Vulnerabilities: Evidence from the Health and Retirement Study by B. Douglas Bernheim, Lorenzo Forni, Jagadeesh Gokhale and Laurence J. Kotlikoff. Published in volume 93, issue 1, pages 354-365 of American Economic Review, March 2003