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Parents’ strategic transfers and sibling competition in the presence of pay-as-you-go pensions

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  • Yakita, Akira

Abstract

In a non-cooperative Nash game in which children compete for their parents’ financial transfers, we demonstrate that if the children’s attention is sufficiently perceived by elderly parents as a merit good, then a payroll tax hike might increase children’s attention devoted to elderly parents, thereby reducing the labor supply of grown-up children and possibly reducing elderly pension benefits.

Suggested Citation

  • Yakita, Akira, 2018. "Parents’ strategic transfers and sibling competition in the presence of pay-as-you-go pensions," Economics Letters, Elsevier, vol. 170(C), pages 63-65.
    • Handle: RePEc:eee:ecolet:v:170:y:2018:i:c:p:63-65
    DOI: 10.1016/j.econlet.2018.06.001
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    References listed on IDEAS

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    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
    3. Charles Yuji Horioka & Emin Gahramanov & Aziz Hayat & Xueli Tang, 2018. "Why Do Children Take Care Of Their Elderly Parents? Are The Japanese Any Different?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(1), pages 113-136, February.
    4. Yang-Ming Chang & Zijun Luo, 2015. "Endogenous division rules as a family constitution: strategic altruistic transfers and sibling competition," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(1), pages 173-194, January.
    5. Alessandro Cigno & Mizuki Komura & Annalisa Luporini, 2017. "Self-enforcing family rules, marriage and the (non)neutrality of public intervention," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 805-834, July.
    6. Yang-Ming Chang, 2012. "Strategic transfers, redistributive fiscal policies, and family bonds: a micro-economic analysis," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1481-1502, October.
    7. Makoto Hirazawa & Koji Kitaura & Akira Yakita, 2014. "Fertility, Intra‐Generational Redistribution, and Social Security Sustainability," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(1), pages 98-114, February.
    8. Yang-Ming Chang, 2009. "Strategic altruistic transfers and rent seeking within the family," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(4), pages 1081-1098, October.
    9. Yang-Ming Chang & Dennis L. Weisman, 2005. "Sibling Rivalry and Strategic Parental Transfers," Southern Economic Journal, John Wiley & Sons, vol. 71(4), pages 821-836, April.
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    Cited by:

    1. Oscar Erixson & Henry Ohlsson, 2019. "Estate division: equal sharing, exchange motives, and Cinderella effects," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(4), pages 1437-1480, October.
    2. Akira Yakita, 2020. "Fertility decisions of families in an intergenerational exchange model," Review of Development Economics, Wiley Blackwell, vol. 24(4), pages 1447-1462, November.
    3. Yakita, Akira, 2020. "Economic development and long-term care provision by families, markets and the state," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    4. Yakita, Akira, 2019. "Optimal long-term care policy in an intergenerational exchange setting," Research in Economics, Elsevier, vol. 73(4), pages 321-328.

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    More about this item

    Keywords

    Children’s attention; Sibling competition; Strategic bequest motive; Transfer-seeking;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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