Charitable contributions and intergenerational transfers

This paper investigates the effects of bequest taxes and the income of children on the lifetime charitable contributions of parents. Using matched income tax records for parents and children, the results show a positive elasticity of 0.6 for contributions with respect to the tax price of bequests. The paper also finds that the income of children affects the amount that parents contribute to charity. The results show a positive elasticity of up to 0.14 for contributions by parents with respect to the income of children, implying that when children are better off, parents are likely to increase charitable giving.