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Compensatory Inter Vivos Gifts

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Author Info
Stefan Hochguertel () (VU University Amsterdam)
Henry Ohlsson () (Uppsala University)

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Abstract

Parents’ transfer motives are important for understanding, e.g., macroeconomics, income (re)distribution, savings, and public finance. Using data from six biennial waves of the Health and Retirement Study 1992–2002, we estimate grouped tobit-type latent variable models with multi-level error components. First, we find that inter vivos transfers from parents to children are gifts, and not temporary help to overcome liquidity constraints. Second, inter vivos gifts are compensatory in the sense that life-time poorer children will receive higher transfers than their life-time richer siblings. Third, inter vivos gifts do not, however, make up the entire difference in life-time incomes.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-074/3.

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Date of creation: 24 Sep 2007
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Handle: RePEc:dgr:uvatin:20070074

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Related research
Keywords: inter vivos gifts compensatory transfers liquidity constraints altruism exchange

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Find related papers by JEL classification:
D10 - Microeconomics - - Household Behavior - - - General
D64 - Microeconomics - - Welfare Economics - - - Altruism
D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Francois-Charles Wolff & Seymour Spilerman & Claudine Attias-Donfut, 2005. "Do Parents Help More their Less Well-Off Children? Evidence from a Sample of Migrants to France," Microeconomics 0504001, EconWPA. [Downloadable!]
  2. Audrey Light & Kathleen McGarry, 2004. "Why Parents Play Favorites: Explanations for Unequal Bequests," American Economic Review, American Economic Association, vol. 94(5), pages 1669-1681, December. [Downloadable!] (restricted)
  3. Nordblom, Katarina & Ohlsson, Henry, 2002. "BEQUESTS, GIFTS, AND EDUCATION Swedish evidence on parents’ transfer behavior," Working Papers in Economics 69, Göteborg University, Department of Economics. [Downloadable!]
  4. Audrey Light & Kathleen McGarry, 2003. "Why Parents Play Favorites: Explanations for Unequal Bequests," NBER Working Papers 9745, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Donald Cox & Beth J. Soldo, 2004. "Motivation for Money and Care that Adult Children Provide for Parents: Evidence from "Point-Blank" Survey Questions," Working Papers, Center for Retirement Research at Boston College 2004-17, Center for Retirement Research. [Downloadable!]
  6. Pierre Pestieau, 2002. "The Role of Gift and Estate Transfers in the United States and in Europe," CREPP Working Papers 0202, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège. [Downloadable!]
  7. Audrey Light & Kathleen McGarry, 2003. "Why Parents Play Favorites: Explanations for Unequal Bequests," Working Papers 03-01, Ohio State University, Department of Economics. [Downloadable!]
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