EconPapers    
Economics at your fingertips  
 

Intergenerational Transfers, Living Arrangements and Development

Alice Schoonbroodt

No 158, 2012 Meeting Papers from Society for Economic Dynamics

Abstract: Further, a combination of shifts in children's market opportunities and the introduction of PAYG social security may help account for fertility patterns, living arrangements and intergenerational wealth flows over the past two centuries. The theoretical model we have in mind shows that the optimal living arrangement until the beginning of the 19th century may have been the farm and community based extended family in which parents had full control over their adult children, high fertility would follow naturally. During the 19th and early 20th century, child labor and compulsory education policies were introduced while adult children's outside options (in emerging labor markets) increased significantly, which coincided with the fertility decline and an initial increase in education levels. The model also replicates this pattern. Given young adults' increasing opportunities, parents and children may then have agreed to separate, the parent thereby foregoing transfers from the children which are no longer enforceable. In 1937 the U.S. government introduced a PAYG social security system. Such a system tends to decrease the desire of parents to take from their children. Hence, desired transfers to children increase. These may come in the form of educational investments, which were increasingly profitable. Hence, this combination may have generated Caldwell (1978)'s reversal of net transfers between parents and children. Whether these channels indeed played a quantitatively important role in U.S. fertility history is an additional question here.

Date: 2012
New Economics Papers: this item is included in nep-dem and nep-dge
References: Add references at CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2012/paper_158.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed012:158

Access Statistics for this paper

More papers in 2012 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann (chuichuiche@gmail.com).

 
Page updated 2024-12-28
Handle: RePEc:red:sed012:158