Intergenerational Transfers and the Demonstration Effect

Donald Cox () and Oded Stark
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Oded Stark: Harvard University

No 329., Boston College Working Papers in Economics from Boston College Department of Economics

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.

Keywords: Demonstration effect; private transfers; altruism; elderly support; fertility; inculcation; family values (search for similar items in EconPapers)
JEL-codes: D10 D64 J12 J13 J14 J18 (search for similar items in EconPapers)
Date: Written 1996-01-01
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