How Important are Intergenerational Transfers of Time? A Macroeconomic Analysis

Emanuela Cardia () and Serena Ng ()

No 395, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper examines the implications of intergenerational transfers of time and money for labor supply and capital accumulation. Although intergenerational transfers of time in the form of grandparenting are as substantial as monetary transfers in the data, little is known about the role and importance of time transfers. In this paper, we calibrate an overlapping generations model extended to allow for both time and monetary transfers to the US economy. We use simulations to show that time transfers have important positive effects on capital accumulation and that these effects can be as significant as those of monetary transfers. However, while time transfers increase the labor supply of the young, monetary transfers produce an income effect that tends to decrease work effort. We also find that child care tax credits have little impact on parental time and money transfers, but that a universal child tax credit would increase the welfare of the rich while the poor would benefit from a means-tested program.

Keywords: intergenerational transfers; time use; child care; home production; grandparentigg; overlapping generations (search for similar items in EconPapers)
JEL-codes: D9 J1 J2 (search for similar items in EconPapers)
Pages: 32 pages
Date: 1997-12-01
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Related works:
Working Paper: How Important Are Intergenerational Transfers of Time? a Macroeconomic Analysis (2000)
Working Paper: How Important Are Intergenerational Transfers of Time? A Macroeconomic Analysis (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:395

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