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An Experimental Study in the Crowding-Out Effect of Public Transfers in a Model with Multiple Families

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  • Güth, W.
  • Offerman, T.J.S.
  • Potters, J.J.M.
  • Strobel, M.
  • Verbon, H.A.A.

    (Tilburg University, Center for Economic Research)

Abstract

We study an overlapping-generations experiment with multiple families in which redistributional transfers can take the form of support to the elderly or grants to children.Supporting the old is a purely inter-generational (intra-family) transfer, whereas grants to children also involve an element of intra-generational (inter-family) solidarity.Our treatment variable is the tax rate determining the amount of redistribution by means of the compulsory pension scheme.We investigate to which degree compulsory solidarity crowds out voluntary solidarity.We also consider whether voluntary solidarity relies more on grants to children or on support to the old aged, and the mechanisms which are used in eliciting transfers from family members from other generations.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2000-54.

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Date of creation: 2000
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Handle: RePEc:dgr:kubcen:200054

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Web page: http://center.uvt.nl

Related research

Keywords: within-family transfers; overlapping generations; redistributive public-pension system; crowding out of private transfers; reciprocity;

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References

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  1. William G. Gale & John Karl Scholz, 1994. "Intergenerational Transfers and the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 145-160, Fall.
  2. 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..
  3. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  4. Abbink, Klaus & Abdolkarim Sadrieh, 1995. "RatImage - research Assistance Toolbox for Computer-Aided Human Behavior Experiments," Discussion Paper Serie B 325, University of Bonn, Germany.
  5. Kotlikoff, Laurence J, 1988. "Intergenerational Transfers and Savings," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 41-58, Spring.
  6. Becker, Gary S, 1993. "Nobel Lecture: The Economic Way of Looking at Behavior," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 385-409, June.
  7. 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.
  8. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
  9. Heijden, E.C.M. van der & Nelissen, J.H.M. & Potters, J.J.M. & Verbon, H.A.A., 1998. "Transfers and the effect of monitoring in an overlapping-generations experiment," Open Access publications from Tilburg University urn:nbn:nl:ui:12-76896, Tilburg University.
  10. Ehrlich, Isaac & Lui, Francis T, 1998. "Social Security, the Family, and Economic Growth," Economic Inquiry, Western Economic Association International, vol. 36(3), pages 390-409, July.
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Cited by:
  1. Güth, W. & Sutter, M. & Verbon, H.A.A. & Weck-Hannemann, H., 2001. "Family Versus Public Solidarity: Theory and Experiment," Discussion Paper 2001-86, Tilburg University, Center for Economic Research.

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