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The Effect of Social Entitlement Programmes on Private Transfers: New Evidence of Crowding Out

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  • Kristopher Gerardi
  • Yuping Tsai

Abstract

type="main" xml:id="ecca12062-abs-0001"> This paper exploits a policy experiment to identify the crowding-out effects of public transfers on the incidence and level of private transfers. The introduction of a large social security programme in Taiwan is used to estimate the effect of an exogenous increase in government transfer payments to the elderly on the private transfer behaviour of their adult children. Using an instrumental variables strategy that accounts for the endogeneity of receiving public transfers, the empirical results show some evidence of crowding out on the extensive margin of private transfers.

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  • Kristopher Gerardi & Yuping Tsai, 2014. "The Effect of Social Entitlement Programmes on Private Transfers: New Evidence of Crowding Out," Economica, London School of Economics and Political Science, vol. 81(324), pages 721-746, October.
  • Handle: RePEc:bla:econom:v:81:y:2014:i:324:p:721-746
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    Cited by:

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    2. Achim Kemmerling & Michael Neugart, 2019. "Redistributive pensions in the developing world," Review of Development Economics, Wiley Blackwell, vol. 23(2), pages 702-726, May.
    3. Pelek, Selin & Polat, Sezgin, 2019. "Exploring inter-household transfers:An assessment using panel data from Turkey," GIAM Working Papers 00-0, Galatasaray University Economic Research Center.
    4. Neugart, Michael & Kemmerling, Achim, 2015. "The emergence of redistributive pensions in the developing world," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112884, Verein für Socialpolitik / German Economic Association.
    5. Nikolov, Plamen & Adelman, Alan, 2019. "Do private household transfers to the elderly respond to public pension benefits? Evidence from rural China," The Journal of the Economics of Ageing, Elsevier, vol. 14(C).
    6. Nikolov, Plamen & Bonci, Matthew, 2020. "Do public program benefits crowd out private transfers in developing countries? A critical review of recent evidence," World Development, Elsevier, vol. 134(C).
    7. Jing You & Miguel Niño-Zarazúa, 2017. "Smoothing or strengthening the ‘Great Gatsby Curve’? The intergenerational impact of China’s New Rural Pension Scheme," WIDER Working Paper Series 199, World Institute for Development Economic Research (UNU-WIDER).
    8. Jing You & Miguel Niño‐Zarazúa, 2019. "The Intergenerational Impact of China's New Rural Pension Scheme," Population and Development Review, The Population Council, Inc., vol. 45(S1), pages 47-95, December.
    9. Iwata, Shinichiro & Yukutake, Norifumi, 2013. "Housing subsidy or parental support: Crowding-out effect of mortgage tax deduction," MPRA Paper 46647, University Library of Munich, Germany.
    10. Zengzeng Fan & Wei Zou, 2019. "Private Transfer Payments, Inequality, and Poverty: From the Perspective of Households," Sustainability, MDPI, Open Access Journal, vol. 11(21), pages 1-21, October.

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