Do aspirations reduce differences in wealth accumulation?

We propose aspirations as a mechanism that allows reconciling the standard theoretical result stating that altruistic individuals accumulate more wealth than non-altruistic individuals with the empirical evidence showing that bequest motivated and non-bequest motivated individuals behave similarly concerning wealth accumulation. In particular, we show that although introducing aspirations at different ages displays different effects on wealth accumulation, both adult and old aspirations reduce the positive effect on wealth accumulation brought about by the bequest motive. Thus, bequest and non-bequest motivated individuals exhibit similar patterns of wealth accumulation, which also results in a decrease in the inequality caused by bequests. As a by-product of our analysis, we show that the introduction of aspirations raises the speed of convergence to the dynastic steady state.