La nature des transferts inter vivos en France : investissements humains, aides financières et transmission du patrimoine

The Nature of Transfers Inter Vivos in France: Human Investment, Financial Aid and Assets Transmission by Luc Arrondel et François-Charles Wolff Two basic hypotheses are put forward to explain descendant transfer inter vivos behaviour: altruism, whereby the parents' welfare depends on their children's welfare, and exchange, whereby both generations are involved in reciprocal relations. These two types of behaviour form the basis for our study of the determinants of the different types of assistance (housing, money, loans and guarantees) and donations observed in INSEE's 1992 Financial Assets survey of a sample of 9,530 households. This analysis makes a number of original findings. Housing and cash assistance are often tantamount to investments in the children's human capital. Conversely, loans and guarantees are more akin to transfers explicable by the fact that the children often have liquidity constraints. Contrary to the predictions of the altruist model, donation amounts increase with recipients' incomes. This practice consequently looks like an anticompensatory transfer. Our findings also confirm certain important conclusions by previous French studies, i.e. the complementarity and transmissibility of transmission practices. Assistance often appears to be complementary, at least for some of the types. For example, supporting households often give cash in addition to housing aid or loans. We also find highly transmissible donation and assistance practices: people give more often if they have been given to and help more often and more readily in the same way if they have been helped.