Family versus public solidarity: theory and experiment

W. Gueth, Matthias Sutter (), H. Verbon and Weck-Hannemann, H.
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Weck-Hannemann, H.: Tilburg University, Center for Economic Research
Authors registered in the RePEc Author Service: Werner Güth ()

No 86, Discussion Paper from Tilburg University, Center for Economic Research

Abstract: We present an overlapping generations model with two families who can guarantee old age support either by intra-family transfers from child to parent or via a tax-financed public pension system encompassing both families. We derive the individually and family-specific optimal decisions and present some more behavioristic hypotheses. Our experimental observations allow conclusions on (1) whether raising taxes crowds out voluntary transfers, (2) how income distributions influence family and public solidarity, and (3) whether participants prefer more to less public solidarity.

Keywords: overlapping; generations (search for similar items in EconPapers)
JEL-codes: C91 C92 D72 H55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent, nep-exp, nep-ltv, nep-net and nep-pbe
Date: 2001
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