Seminar: Labour supply effects of inter-vivos transfers

In this paper, we study the effect of an inter vivos transfer on the recipients’ labour force participation. We focus on individuals who are in the ``peak hour of life’’, that is aged 30-40. To account for potential endogeneity in wages and the likelihood of receiving a (substantial) gift, we use a gift tax reform in 2013 in the Netherlands. Our preliminary findings suggest that an inter vivos transfer reduces recipients’ labour earnings in the year of the gift. The effects are small but statistically significant.