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Intergenerational Transfers, Borrowing Constraints and Household Size

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  • Seiler, Edward J.

Abstract

We examine the relationship between private transfers and household size in the presence of capital market imperfections by incorporating a two-sided dynastic utility specification into an overlapping generations life-cycle model with inter-vivos transfers. 0ur results show that the transfers young liquidity constrained individuals receive are negatively related to their contemporaneous earnings, positively related to their future earnings, and negatively related to the fertility rate under certain conditions. We find that transfers to the old are ambiguous in the fertility rate and that middle-aged savings for old age are positively related to household size if the elasticity of the "altruism multiplier" with respect to the fertility rate is greater than unity, but are negatively related if it is less than unity.

Suggested Citation

  • Seiler, Edward J., 1999. "Intergenerational Transfers, Borrowing Constraints and Household Size," Working Papers 232813, Hebrew University of Jerusalem, Center for Agricultural Economic Research.
  • Handle: RePEc:ags:huaewp:232813
    DOI: 10.22004/ag.econ.232813
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    1. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 1-25.
    2. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-1093, Nov.-Dec..
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    Keywords

    Consumer/Household Economics;

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