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

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  • 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

Suggested Citation

  • Alessandro Cigno & Gianna Giannelli & Furio Rosati & Daniela Vuri, 2006. "Is there such a thing as a family constitution? A test based on credit rationing," Review of Economics of the Household, Springer, vol. 4(3), pages 183-204, September.
    • Handle: RePEc:kap:reveho:v:4:y:2006:i:3:p:183-204
    DOI: 10.1007/s11150-006-0010-7
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    Cited by:

    1. Luc Arrondel & Cyril Grange, 2014. "Bequests and family traditions: the case of nineteenth century France," Review of Economics of the Household, Springer, vol. 12(3), pages 439-459, September.
    2. Alessandro Cigno, 2010. "How to Avoid a Pension Crisis: A Question of Intelligent System Design ," CESifo Economic Studies, CESifo Group, vol. 56(1), pages 21-37, March.
    3. Liliana Pezzin & Robert Pollak & Barbara Schone, 2009. "Long-term care of the disabled elderly: do children increase caregiving by spouses?," Review of Economics of the Household, Springer, vol. 7(3), pages 323-339, September.
    4. Cigno, A., 2016. "Conflict and Cooperation Within the Family, and Between the State and the Family, in the Provision of Old-Age Security," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 609-660, Elsevier.
    5. Jordan D. Matsudaira, 2016. "Economic conditions and the living arrangements of young adults: 1960 to 2011," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(1), pages 167-195, January.
    6. Alessandro Balestrino & Lisa Grazzini & Annalisa Luporini, 2017. "A normative justification of compulsory education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(2), pages 537-567, April.
    7. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    8. Meng-Na Xu & Ming-Lin Wang, 2015. "Individual perception of accessible social capital and attitude to thrift," Review of Economics of the Household, Springer, vol. 13(3), pages 487-500, September.
    9. Alessandro Cigno, 2006. "A constitutional theory of the family," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 259-283, June.
    10. Robert Fenge & Beatrice Scheubel, 2017. "Pensions and fertility: back to the roots," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 93-139, January.
    11. Yang-Ming Chang, 2012. "Strategic transfers, redistributive fiscal policies, and family bonds: a micro-economic analysis," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1481-1502, October.
    12. Alessandro Cigno & Alessandro Gioffré & Annalisa Luporini, 2021. "Evolution of individual preferences and persistence of family rules," Review of Economics of the Household, Springer, vol. 19(4), pages 935-958, December.
    13. Alessandro Cigno, 2007. "Low fertility in Europe: Is the pension system the victim or the culprit? Introduction by Alessandro Cigno," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(3), pages 37-42, October.
    14. Alessandro Cigno & Mizuki Komura & Annalisa Luporini, 2017. "Self-enforcing family rules, marriage and the (non)neutrality of public intervention," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 805-834, July.
    15. Samuel Bentolila & Andrea Ichino, 2008. "Unemployment and consumption near and far away from the Mediterranean," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(2), pages 255-280, April.
    16. Ana Fernandes, 2011. "Altruism, labor supply and redistributive neutrality," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1443-1469, October.
    17. Alessandro Balestrino & Lisa Grazzini & Annalisa Luporini, 2021. "On the political economy of compulsory education," Journal of Economics, Springer, vol. 134(1), pages 1-25, September.
    18. Justina Klimaviciute & Sergio Perelman & Pierre Pestieau & Jerome Schoenmaeckers, 2017. "Caring for dependent parents: Altruism, exchange or family norm?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 835-873, July.
    19. Jordan Matsudaira, 2016. "Economic conditions and the living arrangements of young adults: 1960 to 2011," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(1), pages 167-195, January.
    20. José Casado, 2011. "From income to consumption: measuring households partial insurance," Empirical Economics, Springer, vol. 40(2), pages 471-495, April.
    21. Alessandro Cigno, 2007. "Low fertility in Europe: Is the pension system the victim or the culprit? Introduction by Alessandro Cigno," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(03), pages 37-42, October.
    22. 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;European Society for Population Economics, vol. 26(4), pages 1409-1430, October.

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    More about this item

    Keywords

    Family constitution; Altruism; Exchange; Credit ration; Private transfers; Personal services; D13; J13; J14;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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