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Family Institution and Filial Attention Contract

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  • Jellal, Mohamed

Abstract

In this paper, we examine the pure exchange motive for intergenerational transfers within the family. We consider a model where a selfish parent offers a financial transfer in exchange for the services of the child. Using a Stackelberg game, we study the optimal attention-money contract between the generations. We prove that the amount of gift received may be either positively or negatively related with the child's income. In addition, the relationship between the two variables is non linear and affected by the parent's degree of risk aversion. This nonlinearity, which has been largely neglected to date in empirical analyses, may explain why the exchange transfer motive has received little support in developed countries.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17713.

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Date of creation: 03 Oct 2009
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Handle: RePEc:pra:mprapa:17713

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Keywords: Family; Filial Attention; Care; intergenerational Transfers; Incentives;

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  1. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 95(3), pages 508-46, June.
  2. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1985. "The Strategic Bequest Motive," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 93(6), pages 1045-76, December.
  3. Joseph G. Altonji & Fumio Hayashi & Laurence Kotlikoff, 1995. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," NBER Working Papers 5378, National Bureau of Economic Research, Inc.
  4. Sloan, Frank & Gabriel Picone & Thomas J. Hoerger, 1995. "The Supply of Children's Time to Disabled Elderly Parents," Working Papers, Duke University, Department of Economics 95-46, Duke University, Department of Economics.
  5. Cox, Donald & Jakubson, George, 1995. "The connection between public transfers and private interfamily transfers," Journal of Public Economics, Elsevier, Elsevier, vol. 57(1), pages 129-167, May.
  6. Cox, Donald & Eser, Zekeriya & Jimenez, Emmanuel, 1998. "Motives for private transfers over the life cycle: An analytical framework and evidence for Peru," Journal of Development Economics, Elsevier, Elsevier, vol. 55(1), pages 57-80, February.
  7. Gary S. Becker & Kevin M. Murphy, . "The Family and the State," University of Chicago - Population Research Center, Chicago - Population Research Center 87-15, Chicago - Population Research Center.
  8. Cox, Donald & Rank, Mark R, 1992. "Inter-vivos Transfers and Intergenerational Exchange," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 305-14, May.
  9. Cox, Donald, 1990. "Intergenerational Transfers and Liquidity Constraints," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(1), pages 187-217, February.
  10. Hiedemann, Bridget & Stern, Steven, 1999. "Strategic play among family members when making long-term care decisions," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 40(1), pages 29-57, September.
  11. Anne Laferrere, 1997. "Intergenerational Transmission Models :A Survey," Working Papers, Centre de Recherche en Economie et Statistique 97-23, Centre de Recherche en Economie et Statistique.
  12. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
  13. Francois-Charles Wolff, 2001. "Private intergenerational contact in France and the demonstration effect," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(2), pages 143-153.
  14. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
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