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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

  • Cigno, Alessandro

    ()
    (University of Florence)

  • Giannelli, Gianna Claudia

    ()
    (University of Florence)

  • Rosati, Furio C.

    ()
    (University of Rome Tor Vergata)

  • Vuri, Daniela

    ()
    (University of Rome Tor Vergata)

Abstract

The paper aims to ascertain whether voluntary money transfers may be explained by the existence of self-enforcing family constitutions. We identify a circumstance in which an agent will behave differently if she is optimizing subject to a family constitution, than if she is moved by either altruistic or exchange motivations. The circumstance is the presence of a binding credit ration, which may raise the probability of making a money transfer (and the amount of money transferred) if a family constitution exists, but will have the opposite effect if the transfer is either a gift, or payments for services rendered. Allowing for possible endogeneity, we find that rationing has a positive effect on the probability of giving money, and on the amount given, if the potential giver is under the age of retirement and has children, but no significant effect if the person has no children, or is over the retirement age. This rejects the hypothesis that money transfers are motivated by either altruistic or straight exchange motives, but not the one that these transfers are governed by family constitutions.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1116.

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Length: 29 pages
Date of creation: Apr 2004
Date of revision:
Publication status: published in: Review of Economics of the Household, 2006, 4 (3), 183-204
Handle: RePEc:iza:izadps:dp1116

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Keywords: private transfers; exchange; altruism; family constitution; personal services;

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References

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  1. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
  2. 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.
  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 _079, University of Pennsylvania.
  4. Joseph G. Altonji & Fumio Hayashi & Laurence Kotlikoff, . "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," IPR working papers 95-22, Institute for Policy Resarch at Northwestern University.
  5. 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.
  6. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  7. Stark,Oded, 1999. "Altruism and Beyond," Cambridge Books, Cambridge University Press, number 9780521663731, Fall.
  8. Sloan, Frank & Harold H. Zhang, 1995. "Upstream Intergenerational Transfers," Working Papers 95-15, Duke University, Department of Economics.
  9. Alessandro Cigno, 2006. "A constitutional theory of the family," Journal of Population Economics, Springer, vol. 19(2), pages 259-283, June.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
  14. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  15. 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.
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Citations

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Cited by:
  1. Cigno, Alessandro, 2005. "A Constitutional Theory of the Family," IZA Discussion Papers 1797, Institute for the Study of Labor (IZA).
  2. José Casado, 2011. "From income to consumption: measuring households partial insurance," Empirical Economics, Springer, vol. 40(2), pages 471-495, April.
  3. 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.
  4. Ana Fernandes, 2011. "Altruism, labor supply and redistributive neutrality," Journal of Population Economics, Springer, vol. 24(4), pages 1443-1469, October.
  5. 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.
  6. Alessandro Cigno, 2009. "How to Avoid a Pension Crisis: A Question of Intelligent System Design," CESifo Working Paper Series 2590, CESifo Group Munich.
  7. 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.
  8. 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.
  9. 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.

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