Long-Run Saving Dynamics: Evidence from Unexpected Inheritances

Abstract We exploit inheritance episodes to provide novel causal evidence on the long-run effects of a large financial windfall saving behavior. For identification, we combine longitudinal panel administrative wealth reports with variation in timing sudden, unexpected parental deaths. show that after inheritance, net worth converges toward path established before death, only one-third initial remaining nine years. interpret these findings through lens generalized consumption-saving framework. To quantitatively replicate this behavior, life-cycle consumption models require impatient consumers and strong precautionary motives.