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Is there such a thing as a family constitution? A test based on credit rationing

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Author Info

  • Alessandro Cigno

    ()

  • Gianna Giannelli
  • Furio Rosati
  • Daniela Vuri

    ()

Abstract

The paper tests the hypothesis that private transfers can be explained by the existence of self-enforcing family constitutions prescribing the minimum level at which a person in middle life should support her young children and elderly parents. The test is based on the effect of a binding credit ration on the probability of making a money transfer, which can be positive only in the presence of family constitutions. Allowing for the possible endogeneity of the credit ration, we find that rationing has a positive effect on the probability of giving money if the potential giver is under the age of retirement, but no significant effect if the person is already retired. This appears to reject the hypothesis that transfer behavior is the outcome of unfettered individual optimization on the part of either altruistic or exchange motivated agents, but not the one that individuals optimize subject to a self-enforcing family constitution. The policy implications are briefly discussed. Copyright Springer Science+Business Media, LLC 2006

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File URL: http://hdl.handle.net/10.1007/s11150-006-0010-7
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Bibliographic Info

Article provided by Springer in its journal Review of Economics of the Household.

Volume (Year): 4 (2006)
Issue (Month): 3 (09)
Pages: 183-204

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Handle: RePEc:kap:reveho:v:4:y:2006:i:3:p:183-204

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Web page: http://www.springerlink.com/link.asp?id=109451

Related research

Keywords: Family constitution; Altruism; Exchange; Credit ration; Private transfers; Personal services; D13; J13; J14;

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References

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  1. Sloan, Frank & Harold H. Zhang, 1995. "Upstream Intergenerational Transfers," Working Papers 95-15, Duke University, Department of Economics.
  2. Rosati, Furio Camillo, 1996. "Social security in a non-altruistic model with uncertainty and endogenous fertility," Journal of Public Economics, Elsevier, vol. 60(2), pages 283-294, May.
  3. Mark Rosenzweig & Andrew D. Foster, 1996. "Financial Intermediation, Transfers and Commitment: Do Banks Crowd Out Private Insurance Arrangements in Low-Income Rural Areas?"," Home Pages _076, University of Pennsylvania.
  4. Alessandro Cigno, 2006. "A constitutional theory of the family," Journal of Population Economics, Springer, vol. 19(2), pages 259-283, June.
  5. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
  6. Joseph G. Altonji & Fumio Hayashi & Laurence J. Kotlikoff, 1995. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Boston University - Institute for Economic Development 65, Boston University, Institute for Economic Development.
  7. Cox, Donald & Jakubson, George, 1995. "The connection between public transfers and private interfamily transfers," Journal of Public Economics, Elsevier, vol. 57(1), pages 129-167, May.
  8. Cigno, Alessandro & Camillio Rosati, Furio, 1997. "Rise and fall of the Japanese saving rate: The role of social security and intra-family transfers," Japan and the World Economy, Elsevier, vol. 9(1), pages 81-92, March.
  9. Alessandro Cigno & Luca Casolaro & Furio C. Rosati, 2002. "The Impact of Social Security on Saving and Fertility in Germany," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(2), pages 189-, May.
  10. Cigno, Alessandro & Rosati, Furio C., 1996. "Jointly determined saving and fertility behaviour: Theory, and estimates for Germany, Italy, UK and USA," European Economic Review, Elsevier, vol. 40(8), pages 1561-1589, November.
  11. Stark,Oded, 1999. "Altruism and Beyond," Cambridge Books, Cambridge University Press, number 9780521663731, October.
  12. Guttman, Joel M., 2001. "Self-enforcing reciprocity norms and intergenerational transfers: theory and evidence," Journal of Public Economics, Elsevier, vol. 81(1), pages 117-151, July.
  13. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  14. Cigno, Alessandro & Rosati, Furio Camillo, 1992. "The Effects of Financial Markets and Social Security on Saving and Fertility Behaviour in Italy," Journal of Population Economics, Springer, vol. 5(4), pages 319-41.
  15. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
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Citations

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Cited by:
  1. Alessandro Balestrino & Lisa Grazzini & Annalisa Luporini, 2013. "A Normative Justification of Compulsory Education," Working Papers - Economics wp2013_18.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  2. Alessandro Cigno, 2005. "A constitutional theory of the family," CHILD Working Papers wp14_05, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  3. Samuel Bentolila & Andrea Ichino, 2008. "Unemployment and consumption near and far away from the Mediterranean," Journal of Population Economics, Springer, vol. 21(2), pages 255-280, April.
  4. Alessandro Cigno, 2009. "How to avoid a pension crisis: A question of intelligent system design," CHILD Working Papers wp04_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  5. Ana Fernandes, 2011. "Altruism, labor supply and redistributive neutrality," Journal of Population Economics, Springer, vol. 24(4), pages 1443-1469, October.
  6. Miguel Sánchez-Romero & Concepció Patxot & Elisenda Rentería & Guadalupe Souto, 2013. "On the effects of public and private transfers on capital accumulation: some lessons from the NTA aggregates," Journal of Population Economics, Springer, vol. 26(4), pages 1409-1430, October.
  7. Liliana E. Pezzin & Robert A. Pollak & Barbara S. Schone, 2008. "Long-Term Care of the Disabled Elderly: Do Children Increase Caregiving by Spouses?," NBER Working Papers 14328, National Bureau of Economic Research, Inc.
  8. José María Casado García, 2008. "From Income to Consumption: Measuring Households Partial Insurance," Working Papers 2008-09, FEDEA.
  9. Alessandro Cigno, 2007. "Low fertility in Europe: Is the pension system the victim or the culprit? Introduction by Alessandro Cigno," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 8(3), pages 37-42, October.

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