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Gifts, bequests and family incentives

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  • Jellal, Mohamed
  • Wolff, Francois-Charles

Abstract

In this note, we use the theory of incentive contracting to characterize the pattern of financial transfers within the family. Using an altruistic model based on bounded rationality with one parent and two children, we show that the parent may provide a lower gift to the less well-off child, while bequests are always compensatory
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  • Jellal, Mohamed & Wolff, Francois-Charles, 2007. "Gifts, bequests and family incentives," Economics Letters, Elsevier, vol. 94(3), pages 313-318, March.
    • Handle: RePEc:eee:ecolet:v:94:y:2007:i:3:p:313-318
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    1. Lundholm, Michael & Ohlsson, Henry, 2000. "Post mortem reputation, compensatory gifts and equal bequests," Economics Letters, Elsevier, vol. 68(2), pages 165-171, August.
    2. Cremer, Helmuth & Pestieau, Pierre, 1996. "Bequests as a Heir "Discipline Device."," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(4), pages 405-414, November.
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    5. Stark, Oded, 1998. "Equal bequests and parental altruism: compatibility or orthogonality?," Economics Letters, Elsevier, vol. 60(2), pages 167-171, August.
    6. Kathleen McGarry & Robert F. Schoeni, 1995. "Transfer Behavior in the Health and Retirement Study: Measurement and the Redistribution of Resources within the Family," Journal of Human Resources, University of Wisconsin Press, vol. 30, pages 184-226.
    7. Anderson, Gary M. & Tollison, Robert D., 1991. "A theory of rational childhood," European Journal of Political Economy, Elsevier, vol. 7(2), pages 199-213, July.
    8. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    9. McGarry, Kathleen, 1999. "Inter vivos transfers and intended bequests," Journal of Public Economics, Elsevier, vol. 73(3), pages 321-351, September.
    10. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
    11. Wilhelm, Mark O, 1996. "Bequest Behavior and the Effect of Heirs' Earnings: Testing the Altruistic Model of Bequests," American Economic Review, American Economic Association, vol. 86(4), pages 874-892, September.
    12. McGarry, K & Schoeni, R-F, 1996. "Measurement and the Redistribution of Resources Within the Family," Papers 96-11, RAND - Reprint Series.
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    Cited by:

    1. Elin Halvorsen & Thor O. Thoresen, 2011. "Parents' Desire to Make Equal Inter Vivos Transfers," CESifo Economic Studies, CESifo Group, vol. 57(1), pages 121-155, March.
    2. Ralitza Dimova & François-Charles Wolff, 2008. "Grandchild Care Transfers by Ageing Immigrants in France: Intra-household Allocation and Labour Market Implications," European Journal of Population, Springer;European Association for Population Studies, vol. 24(3), pages 315-340, September.

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    • D1 - Microeconomics - - Household Behavior

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