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Intergenerational Transfers: An Integrative Approach

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  • MORDECHAI E. SCHWARZ

Abstract

The empirical literature was unable to conclude whether intergenerational transfers are motivated mainly by altruistic or strategic motivations. I suggest that both may be plausible, namely that people are neither pure altruists who derive utility simply from being good to others, nor pure egoists who consider only strategic selfish considerations, but are actually driven by a combination of incentives. I show that assuming a combination of motives changes, sometimes dramatically, the results obtained in the traditional models and resolves the puzzle concerning the empirical results.

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  • Mordechai E. Schwarz, 2006. "Intergenerational Transfers: An Integrative Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(1), pages 61-93, January.
    • Handle: RePEc:bla:jpbect:v:8:y:2006:i:1:p:61-93
    DOI: 10.1111/j.1467-9779.2006.00253.x
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    References listed on IDEAS

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    1. Barro, Robert J, 1989. "The Ricardian Approach to Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 37-54, Spring.
    2. Laurence J. Kotlikoff & Lawrence H. Summers, 1986. "The Contribution of Intergenerational Transfers to Total Wealth: A Reply," NBER Working Papers 1827, National Bureau of Economic Research, Inc.
    3. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1.
    4. Sumon K. Bhaumik, 2001. "Intergenerational transfers: the ignored role of time," MPIDR Working Papers WP-2001-008, Max Planck Institute for Demographic Research, Rostock, Germany.
    5. Hayashi, Fumio, 1995. "Is the Japanese Extended Family Altruistically Linked? A Test Based on Engel Curves," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 661-674, June.
    6. Kathleen McGarry, 2000. "Testing Parental Altruism: Implications of a Dynamic Model," NBER Working Papers 7593, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Paula C. Albuquerque, 2014. "The Interaction of Private Intergenerational Transfers Types," Working Papers Department of Economics 2014/03, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    2. Marta Melguizo Garde, 2007. "La motivación de las transmisiones lucrativas entre generaciones de una familia: modelos teóricos y evidencia empírica," Hacienda Pública Española / Review of Public Economics, IEF, vol. 181(2), pages 81-118, June.

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