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The division of parental transfers in Europe

Javier Olivera ()

No 201220, Working Papers from Geary Institute, University College Dublin

Abstract: In this paper we explore the patterns of the division of inter-vivos financial transfers from parents to adult children in a sample of 12 European countries. We exploit two waves of the Survey of Health, Aging, and Retirement in Europe (SHARE) for 50+. Contrary to previous studies, we find a higher frequency of parents dividing equally their transfers. We argue that altruistic parents are also concerned with norms of equal division, and hence don’t fully offset child income differences. The parents start to give larger transfers to poorer children if the child income inequality becomes unbearable from the parent’s view. We find econometric evidence suggesting this behaviour under different specifications and strategies. Furthermore, contextual variables like the gini coefficient and pension expenditures help to explain country differences with respect to the division of inter-vivos transfers. The lower frequency of equal division found in studies with American data may respond to the higher inequality and relatively lower pension expenditures in US.

Keywords: inter-vivos transfers; altruism; equal division; Europe (search for similar items in EconPapers)
JEL-codes: D19 D64 J18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-eec and nep-eur
Date: 2012-09-25
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http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201220.pdf First version, 2012 (application/pdf)

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Working Paper: The division of parental transfers in Europe (2011) Downloads
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