 Parental Altruism and Inter Vivos Transfers: Theory and EvidenceJoseph Altonji, Fumio Hayashi and Laurence Kotlikoff IPR working papers from Institute for Policy Resarch at Northwestern University Abstract: This paper uses PSID data on the extended family to test whether inter vivos transfers from parents to children are motivated by altruism. Specifically, the paper tests whether an increase by one dollar in the income of parents actively making transfers to a child coupled with a one dollar reduction in that child's income results in the parents increasing their transfer to the child by one dollar. This restriction on parental and child transfer-income derivatives is derived for the standard altrusim model augmented to include uncertain and liquidity constraints. These additional elements pin down the timing of inter vivos transfers. The paper's method of estimating income-transfer derivatives takes into account unobserved heterogeneity across families in the degree of altruism. The findings strongly reject the altrusim hypothesis. Redistributing one dollar from a recipient child to donor parents leads to less than a 13 cent increase in the parents' transfer to the child -- far less than the one dollar increase implied by altruism. References: Add references at CitEc There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wop:nwuipr:95-22 Access Statistics for this paper More papers in IPR working papers from Institute for Policy Resarch at Northwestern University Contact information at EDIRC. |
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