The division of inter-vivos parental transfers in Europe

Javier Olivera

No 2016-06, LISER Working Paper Series from Luxembourg Institute of Socio-Economic Research (LISER)

Abstract: This paper explores the patterns of the division of inter-vivos financial transfers from old parents to adult children in a sample of 14 European countries drawn from two waves of the Survey of Health, Aging, and Retirement in Europe. Contrary to previous research, mostly focused on the US, this study finds a higher number of parents who divide their financial transfers among their adult children equally. On average, 36% of European parents divide equally. These results contrast sharply with the approximately 6.4%-9.2% of American parents giving equal transfers. It is possible that altruistic parents are also concerned with a norm of equal division, and therefore they do not fully offset the differences of income among their children as predicted by the standard model of altruism. The econometric results show that parents are more likely to give equal transfers if, in their view, income inequality among their children is not too high. Furthermore, the analysis is extended by adding variables at the country level. In this regard, income inequality, pension expenditures, the societal level of altruism and inheritance taxes are key to explaining country differences.

Keywords: Inter-vivos transfers; Altruism; Equal division; Income inequality; Pensions (search for similar items in EconPapers)
JEL-codes: D31 D64 D91 H31 H55 J18 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-06
New Economics Papers: this item is included in nep-age and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The division of inter-vivos parental transfers in Europe (2017)
Working Paper: The division of inter-vivos parental transfers in Europe (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:irs:cepswp:2016-06

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