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Family Transfers Involving Three Generations

Author

Listed:
  • Arrondel, L.
  • Masson, A.

Abstract

Most models of family intergenerational transfers consider only two générations (parents and children) and focus on two motives for parental transfers : altruism and exchange, while assuming almost perfect susbtitution between inter vivos transfers and bequests. Based upon French evidence, this paper shows, on the contrary, that inter vivos downward transfers, made at quite distant date over the life cycle, belong to three distinct categories, according to the main objective pursued by parents : investment in child's education ; financial assistance ; wealth transmission (being susbtitutes for bequests only in the third case). Moreover, the domain of the analysis of familial behavior is expanded from two to three generations. French data do indeed show that, for each type of downward transfer, parents are strongly influenced by the behavior of their own parents ; moreover, for upward transfers, there is some, less robust, evidence of typical behaviors similar to Cox and Stark demonstration effect : parents help their own (old) parents, expecting to receive comparable support in old days from their children. Such behaviors can however be given different interpretations (that all blur the distinction between altruistic and exchange motives) : imitation ; transmission of family values or norms ; preference shaping of formation ; "indirect reciprocities", where the beneficiary of a transfer does not give back to the initial giver but to a third person of another generation.

Suggested Citation

  • Arrondel, L. & Masson, A., 1999. "Family Transfers Involving Three Generations," DELTA Working Papers 1999-16, DELTA (Ecole normale supérieure).
  • Handle: RePEc:del:abcdef:1999-16
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    Cited by:

    1. Thomas Leopold & Thorsten Schneider, 2009. "Schenkungen und Erbschaften im Lebenslauf: vergleichende Längsschnittanalysen zu intergenerationalen Transfers," SOEPpapers on Multidisciplinary Panel Data Research 234, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Partha Deb & Cagla Okten & Una Osili, 2010. "Giving to family versus giving to the community within and across generations," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(3), pages 963-987, June.
    3. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    4. Arrondel, Luc & Masson, Andre, 2001. " Family Transfers Involving Three Generations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(3), pages 415-443, September.
    5. Kirchsteiger, Georg & Sebald, Alexander, 2010. "Investments into education--Doing as the parents did," European Economic Review, Elsevier, vol. 54(4), pages 501-516, May.
    6. Andaluz, Joaquín & Marcén, Miriam & Molina, José Alberto, 2007. "Income Transfers, Welfare and Family Decisions," IZA Discussion Papers 2804, Institute of Labor Economics (IZA).
    7. Sanna Nivakoski, 2015. "The Exchange Motive in Intergenerational Transfers," Working Papers 201510, Geary Institute, University College Dublin.
    8. Mohamed Jellal & Francois-Charles Wolff, 2002. "Altruistic Bequests with Inherited Tastes," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 95-113, August.
    9. Paula C. Albuquerque, 2014. "The Interaction of Private Intergenerational Transfers Types," Working Papers Department of Economics 2014/03, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    10. Marta Melguizo Garde, 2007. "La motivación de las transmisiones lucrativas entre generaciones de una familia: modelos teóricos y evidencia empírica," Hacienda Pública Española / Review of Public Economics, IEF, vol. 181(2), pages 81-118, June.
    11. Mauro Baranzini, 2005. "Modigliani's life-cycle theory of savings fifty years later," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 109-172.
    12. Matthieu CLEMENT, 2007. "The relation between private transfers and household income on looking at altruism, exchange and risk-sharing hypotheses. An empirical analysis applied to Russia (In French)," Cahiers du GREThA (2007-2019) 2007-08, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    13. Tom Krebs & Moritz Kuhn & Mark L. J. Wright, 2015. "Human Capital Risk, Contract Enforcement, and the Macroeconomy," American Economic Review, American Economic Association, vol. 105(11), pages 3223-3272, November.
    14. Ivo Bischoff & Nataliya Kusa, 2015. "Policy preferences for inheritance taxation," MAGKS Papers on Economics 201531, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    15. Leif Andreassen, 2004. "Mortality, fertility and old age care in a two-sex growth model," Discussion Papers 378, Statistics Norway, Research Department.
    16. Mauro Baranzini, 2005. "Modigliani's life-cycle theory of savings fifty years later," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 109-172.
    17. Mohamed Jellal & François-Charles Wolff, 2003. "Solidarités familiales par la démonstration," Revue économique, Presses de Sciences-Po, vol. 54(4), pages 785-810.
    18. Katarina Nordblom & Henry Ohlsson, 2011. "Bequests, gifts, and education: links between intergenerational transfers," Empirical Economics, Springer, vol. 40(2), pages 343-358, April.
    19. Luc Arrondel & Cyril Grange, 2014. "Bequests and family traditions: the case of nineteenth century France," Review of Economics of the Household, Springer, vol. 12(3), pages 439-459, September.
    20. Miguel Angel Barberán Lahuerta, 2006. "Redistribution and progressivity of taxes on inheritances and donations and analysis with data of panel," Hacienda Pública Española / Review of Public Economics, IEF, vol. 177(2), pages 25-55, April.
    21. Jay Zagorsky, 2013. "Do People Save or Spend Their Inheritances? Understanding What Happens to Inherited Wealth," Journal of Family and Economic Issues, Springer, vol. 34(1), pages 64-76, March.
    22. Rob Alessie & Viola Angelini & Giacomo Pasini, 2014. "Is It True Love? Altruism Versus Exchange in Time and Money Transfers," De Economist, Springer, vol. 162(2), pages 193-213, June.
    23. Emanuele Ciani & Claudio Deiana, 2016. "No Free Lunch, Buddy: Housing Transfers and Informal Care Later in Life," Center for the Analysis of Public Policies (CAPP) 0134, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    24. Victoria Ateca-Amestoy & Arantza Ugidos, 2013. "The Impact of Different Types of Resource Transfers on Individual Wellbeing: An Analysis of Quality of Life Using CASP-12," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 973-991, February.

    More about this item

    Keywords

    GENERATIONS ; FAMILY;

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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