Exploring inter-household transfers:An assessment using panel data from Turkey

This paper aims to contribute to the growing literature on the crowding out/in effect of public transfers on private ones by using two consecutive four-year SILC panel data from Turkey covering years 2008-2011 and 2012-2015. Over the period under study, the number of beneficiaries has increased and the welfare system has expanded to segments of society that were uncovered before. In order to quantify the interaction between public and private transfers, we estimate the effects of public transfers on the amount and likelihood of receiving private transfers by controlling various household characteristics and individual heterogeneity through panel structure. We find that public transfers at the individual level lead to crowding out effects, while public transfers targeting household has no significant neutralizing effect on private transfers. Comparing results from different periods, we observe that the effect of both altruistic motive and crowding-out are decreasing. Additionally, we broaden the definition of standard private transfers to include rent-free (subsidized) housing support. Our results reveal that broadly defined private transfers have a downstream character, are less altruistically motivated and produce less crowding-out effect compared to standard definition.