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Intergenerational Transfers and the Demonstration Effect

Author

Listed:
  • Donald Cox

    (Boston College)

  • Oded Stark

    (Harvard University)

Abstract

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.

Suggested Citation

  • Donald Cox & Oded Stark, 1996. "Intergenerational Transfers and the Demonstration Effect," Boston College Working Papers in Economics 329., Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:329
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    References listed on IDEAS

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    More about this item

    Keywords

    Demonstration effect; private transfers; altruism; elderly support; fertility; inculcation; family values;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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