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Inter Vivos Gifts: Compensatory or Equal Sharing?

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Author Info
Stefan Hochguertal (EUI)
Henry Ohlsson (Goteborg University)

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Abstract

Empirical studies of intergenerational transfers usually find that bequests are equally divided among heirs while inter vivos gifts tend to be compensatory. Using the HRS data set from the U.S. we find that only 5 % of parents who give, divide their gifts equally among their children. Estimating probit models, using family panels, we find that gifts are compensatory in the sense that a child is more likely to receive a gift if she works fewer hours and has lower earnings than than her brothers and sisters. These results carry over to the amounts given. Fixed effects Tobit estimations show that the fewer hours a child works and the lower her income is, the more the parents give. Gifts are compensatory. The empirical results are, therefore, consistent with the predictions of the altruistic model of intergenerational transfers.

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Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0699.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0699

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  20. Lundholm, Michael & Ohlsson, Henry, 1999. "Post Mortem Reputation, Compensatory Gifts and Equal Bequests," Research Papers in Economics 1999:1, Stockholm University, Department of Economics. [Downloadable!]
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  21. Menchik, Paul L, 1980. "Primogeniture, Equal Sharing, and the U. S. Distribution of Wealth," The Quarterly Journal of Economics, MIT Press, vol. 94(2), pages 299-316, March. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alessandro Balestrino, 2000. "Gifts, Lies and Bequests," CHILD Working Papers wp01_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY. [Downloadable!]
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