creator: Cox, Donald
0-11 of 11
Intergenerational Transfers and the Demonstration Effect
description- – How can parents secure old-age support in the form of care, attention or financial transfers from their children? We explore the enforcement of implicit intergenerational agreements from a fresh angle by studying the possibility that the child's conduct is conditioned by the parents' example. Parents can take advantage of this learning potential by making transfers to their own parents when children are present to observe such transfers. Parents who desire old-age support have an incentive to behave appropriately. The idea that the parents' behavior is aimed at inculcating desirable behavior in their children generates testable hypotheses about transfers that we investigate using household survey microdata. The demonstration-effect approach also has implications for such diverse phenomena as population aging and the labor market participation of women.
- – WP329
- – 1994-06-01
- – application/pdf
Private Safety Nets through Inter-Household Transfers: The Case of Viet Nam
description- – This paper uses the Viet Nam Living Standards Survey (VNLSS) to provide a snapshot of private transfer activity. We investigate private transfer patterns along a variety of dimensions, such as age, household resources, demographic make-up of the household and characteristics of the region of residence. We find that private transfers are substantial and widespread in Viet Nam, and their patterns suggest that they sometimes function like means-tested public transfers. They are targeted to vulnerable groups such as low-income households or those stricken with illness, for example. But they are also disproportionately given to the well-educated. A substantial fraction of elderly households receive private transfers, suggesting that they function in part as old-age support.
- – WP330
- – 1996-05-01
- – application/pdf
Family Safety Nets and Economic Transition: A Study of Worker Households in Poland
description- – Can Eastern European families most severely impoverished during the transition to capitalism rely on private family safety nets? This question is likely critical for the transition's success, but little is known about family networks in Eastern Europe. We analyze newly available Polish household surveys, conducted both before and after Poland's economic transition, which measure private inter-household transfers. Such transfers are large and widespread in Poland, and in many ways they appear to function like means-tested public transfers. They flow from high to low-income households and are targeted to young couples, large families and those experiencing illness. Private transfer patterns also suggest that they are responsive to liquidity constraints. Our results from 1987 data indicate that private transfers could fill a non-trivial portion of the income gap left by unemployment. But we also find evidence from 1992 data that family networks weakened somewhat after the transition.
- – WP328
- – 1996-05-01
- – application/pdf
Motives for Private Transfers over the Life Cycle: An Analytical Framework and Evidence for Peru
description- – This paper tests for the motives for private income transfers. We consider two motives: altruism and exchange. The question of private-transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income. Using a household survey for Peru, we find that transfer amounts received increase with recipient pre-transfer income, which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange. We also find that capital market imperfections are likely to be an important cause of private transfers, and that social security benefits"crowd out"the incidence of private transfers.
- – WP327
- – 1996-04-01
- – application/pdf
How Responsive are Private Transfers to Income? Evidence from a Laissez-Faire Economy
description- – In recent years there has been rapidly growing interest in the implications of altruistic preferences for economic behavior. Undoubtedly most of this interest is fueled by altruism's often pivotal role in economic models and policy issues. Yet there is also an emerging consensus that empirical evidence for altruistic preferences--as specified in the seminal models of Becker and Barro--is lacking, at least for the United States. The failure to find strong evidence for altruism flies in the face of what seems to be an eminently commonsensical proposition about behavior. A possible reason for the lack of evidence for altruism in a developed country like the United States is that its substantial public transfers may have already crowded out private ones to a large extent, rendering the remaining small samples uninformative about altruism. In this paper we focus on a country with extremely limited public income redistribution, the Philippines. We examine a model that nests the Becker-Barro model of altruism and predicts that the relationship between private transfers and pre-private-transfer income will be non-linear, taking the form of a spline. We estimate this model by non-linear least squares, treating the threshold (knot point) as an unknown parameter, using recently developed econometric techniques. This allows a rigorous econometric test of the altruism hypothesis. We find that private transfers are widespread, highly responsive to household economic status and conform to patterns implied by altruistic utility interdependence. In particular, among the poorest households, we estimate that decreases in pre-private-transfer income would prompt large increases in private transfers. Our findings have significant policy implications, because they imply that attempts to improve the status of the poor could be thwarted by private responses. Some of the gains from public transfers would be shared with richer households whose burden of support for their less fortunate kin is eased. So the problems that altruistic preferences create for public income redistribution, first pointed out by Becker and Barro over 20 years ago, do indeed matter empirically.
- – WP341
- – 1999-11-01
- – application/pdf
Intergenerational Linkages in Consumption Behavior
description- РConsumption is partly a social activity, yet most studies of consumer behavior treat households in isolation. We investigate familial relationships in consumption patterns using a sample of parents and their children from the Panel Study of Income Dynamics. We find a positive and statistically significant parent-specific effect on children̻s consumption even after controlling for the effect of parental income, and we find similar effects for sibling pairs. Child consumption responds negatively to large post-retirement shortfalls in consumption of the parents. This behavior holds up even after allowing for the possibility of smaller parent-to-child transfers made necessary by the parental consumption shortfalls. These results suggest that although income is an important source of the intergenerational correlation, parental choices and experiences also affect consumption behavior of the children.
- – WP482
- – 2000-11-08
- – application/pdf
How Do People Decide to Allocate Transfers Among Family Members?
description- – Despite recent advances in data collection and the growing number of empirical studies that examine private intergenerational transfers, there still exist significant gaps in our knowledge. Who transfers what to whom, and why do they it? I argue that some of these gaps could be filled by departing from the standard parent-child framework and concentrating instead on fathers, mothers, sons and daughters in a way that accounts for fundamentaland sometimes obviousmale-female differences in concerns and objectives in family life. Elementary sex differences in reproductive biology constitute the basic building blocks of studies of family behavior in many disciplines, but despite recent progress they get far less attention than they deserve in economic studies of the family. I explore, separately, the implications of three basic biological facts for intergenerational transfer behavior. The first is paternity uncertainty: how does it affect the incentives of fathers, mothers and of various grandparents to invest in children? The second is differing reproductive prospects of sons versus daughters: when are sons a better investment than daughters and vice versa? The third is conflict: How much acrimony might we expect to occur in families, and why? In examining these issues I also explore household survey data from the United States. This preliminary evidence is consistent with non-biological as well as biological explanations of behavior. Nonetheless, the biological focus confers two advantages, by generating falsifiable predictions and by illuminating new avenues for empirical work. There is enormous potential for further micro-data-based empirical work in this area.
- – WP514
- – 2001-10-13
- – application/pdf
Private Inter-household Transfers in Vietnam in the Early and Late 1990s
description- – This chapter uses data from the 1992/93 and 1997/98 Vietnam Living Standards Surveys (VLSS) to describe patterns of money transfers between households. Rapid economic growth during the 1990's did little to diminish the importance of private transfers in Vietnam. Private transfers are large and widespread in both surveys,and they are much larger than public transfers are. Private transfers appear to function like means-tested public transfers, flowing from better off to worse off households and providing old-age support in retirement. Panel evidence suggests some hysteresis in private transfer patterns, but many households also changed from recipients to givers and vice versa between surveys. Changes in private transfers appear responsive to changes in household pre- transfer income, demographic changes and life-course events. Transfer inflows rise upon retirement and widowhood, for example, and are positively associated with increases in health expenditures. It also appears that private transfer inflows increased for households affected by Typhoon Linda, which devastated Vietnam's southernmost provinces in late 1997.
- – WP524
- – 2002-02-02
- – application/pdf
Private Transfers within the Family: Mothers, Fathers, Sons and Daughters
description- – Despite recent advances in data collection and the growing number of empirical studies that examine private intergenerational transfers, there still exist significant gaps in our knowledge. Who transfers what to whom, and why do they it? I argue that some of these gaps could be filled by departing from the standard parent-child framework and concentrating instead on fathers, mothers, sons and daughters in a way that accounts for fundamental--and sometimes obvious--male-female differences in concerns and objectives in family life. Elementary sex differences in reproductive biology constitute the basic building blocks of studies of family behavior in many disciplines, but despite recent progress they get far less attention than they deserve in economic studies of the family. I explore, separately, the implications of three basic biological facts for intergenerational transfer behavior. The first is paternity uncertainty: how does it affect the incentives of fathers, mothers and of various grandparents to invest in children? The second is differing reproductive prospects of sons versus daughters: when are sons a better investment than daughters and vice versa? The third is conflict: How much acrimony might we expect to occur in families, and why? In examining these issues I also explore household survey data from the United States. This preliminary evidence is consistent with non-biological as well as biological explanations of behavior. Nonetheless, the biological focus confers two advantages, by generating falsifiable predictions and by illuminating new avenues for empirical work. There is enormous potential for further micro-data-based empirical work in this area.
- – WP605
- – 2003-12-01
- – application/pdf
Motivation for Money and Care that Adult Children Provide for Parents: Evidence from"Point-Blank"Survey Questions
description- – When adult children provide care for their aging parents, they often do so at great expense to themselves incurring psychic, monetary, emotional, and even physical costs, in conjunction with care that is labor intensive and, at the extreme, unrelenting. While the nature of parent care and the profile of care giving children are well described in the literatures of the social sciences, we still lack insight into why adult children undertake parent care without compensation or compulsion. In this paper, we adopt a novel, direct question approach using newly available data from a special module fielded in the 2000 Health and Retirement Study that included questions on motivations for, and concerns with, the provision of familial assistance. Transfers are not always provided free of pressure from other family members, for example, and familial norms of obligations and traditions appear to matter for many respondents. These findings suggest that the standard set of economic considerations--utility interdependence, budget constraints, exchange, and the like--are insufficient for a complete understanding of private transfer behavior. Though one must always be skeptical about reading too much into what people say about why they do the things they do (or think they will do) we nonetheless conclude that "point-blank" questions offer, at the very least, a worthwhile complement to the more conventional methods for unraveling motivations for private, intergenerational transfers.
- – WP2004-17
- – 2004-05-01
- – application/pdf
Private Transfers in a Cross Section of Developing Countries
description- – Despite being well recognized by economists as an important social and economic force, private transfers are still little understood, and considerable debate surrounds basic questions, such as whether or how private and public transfers might interact. Nearly all empirical work to date has proceeded in piecemeal fashion, with evidence accruing from isolated, individual country case studies, from which generalizations are often dicey at best. We depart from this approach by focusing on a set of 11 diverse developing countries, from which private transfer information was elicited using comparable survey instruments (the World Bank's Living Standards Measurement Surveys). We find many commonalities in private transfer patterns across countries, suggesting that part of private-behavior might emanate from basic behavioral forces shared by these diverse countries. Nowhere, for example, do private transfers seem to flow from the very poor to the very rich. We uncover intercountry differences as well. For example, in some countries, such as Kyrgyzstan, private transfers from older to younger households predominate, but in others, such as Vietnam, they mostly flow from young to old. Further, we find evidence that public and private transfers interact; private old age support tends to be smaller for countries with relatively generous public pension systems. This result has important policy implications, for it implies that the benefits of pension systems could spill over to persons whose burden of care is eased by social insurance.
- – 2006-01-01
- – application/pdf
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