Of rotten kids and Rawlsian parents: The optimal timing of intergenerational transfers

Hendrik JØrges ()
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Hendrik JØrges: Department of Economics, University of Dortmund, D-44221 Dortmund, Germany
Authors registered in the RePEc Author Service: Hendrik Juerges

Journal of Population Economics, 2000, vol. 13, issue 1, 147-157

Abstract: This paper shows that altruistic parents with utilitarian preferences may fare better if they transfer resources to their children early in life instead of delaying the bulk of transfers until after their death. Moreover, the outcome of the analysed "family transfer game" is not Pareto-efficient in the case of bequests. However, if altruistic parents hold Rawlsian preferences, they will be indifferent between gifts and bequests, and Pareto-efficiency is always obtained. In intermediate cases of Atkinson-type welfare functions, welfare losses of bequests compared to gifts disappear as the aversion to inequality converges to infinity.

Keywords: Altruism; bequests; gifts (search for similar items in EconPapers)
JEL-codes: D61 D64 J22 (search for similar items in EconPapers)
Date: 2000-03-17
Note: Received: 3 November 1998/Accepted: 4 May 1999
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Citations: View citations in EconPapers (5)

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