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Giving to Family versus Giving to the Community Within and Across Generations

In this paper, we examine relationship between giving to family, and community institutions, within and across generations, a previously unexplored subject. We investigate the relationship between these two types of transfer networks using new data from the Indonesian Family Life Surveys (IFLS). From our results, financial transfers to family members are positively correlated with giving to community organizations for both parent or origin households and adult split-offs living outside their households of origin. We also study the role of the family in shaping transfer behavior, and find that transfer behavior of adults living outside of their household of origin is significantly associated with parent or origin household transfer behavior. Our estimation strategy is based on the method of maximum simulated likelihood (MSL), which allows us to account for the correlation in error terms within and across generations.

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Paper provided by Hunter College Department of Economics in its series Economics Working Paper Archive at Hunter College with number 02/6.

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Length: 31 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:htr:hcecon:02/6
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  1. Frank P. Stafford & Ngina S. Chiteji, 1999. "Portfolio Choices of Parents and Their Children as Young Adults: Asset Accumulation by African-American Families," American Economic Review, American Economic Association, vol. 89(2), pages 377-380, May.
  2. Alderman, H. & Paxson, C.H., 1992. "Do the Poor Insure? A Synthesis of the Literature on Risk and Consumption in Developing Countries," Papers 164, Princeton, Woodrow Wilson School - Development Studies.
  3. Nathan D. Grawe & Casey B. Mulligan, 2002. "Economic Interpretations of Intergenerational Correlations," NBER Working Papers 8948, National Bureau of Economic Research, Inc.
  4. Arrondel, L. & Masson, A., 1999. "Family Transfers Involving Three Generations," DELTA Working Papers 1999-16, DELTA (Ecole normale supérieure).
  5. Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
  6. Joseph G. Altonji & Fumio Hayashi & Laurence Kotlikoff, 1995. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," NBER Working Papers 5378, National Bureau of Economic Research, Inc.
  7. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
  8. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  9. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  10. James Andreoni & Eleanor Brown & Isaac Rischall, 2000. "Charitable Giving by Married Couples: Who Decides and Why Does it Matter?," Claremont Colleges Working Papers 2000-44, Claremont Colleges.
  11. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
  12. Gerald E. Auten & Holger Sieg & Charles T. Clotfelter, 2002. "Charitable Giving, Income, and Taxes: An Analysis of Panel Data," American Economic Review, American Economic Association, vol. 92(1), pages 371-382, March.
  13. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555.
  14. Lee, L-F., 1990. "On Efficiency of Methods of Simulated Moments and Maximum Simulated Likelihood Estimation of Discrete Response Models," Papers 260, Minnesota - Center for Economic Research.
  15. Pollak, Robert A, 1985. "A Transaction Cost Approach to Families and Households," Journal of Economic Literature, American Economic Association, vol. 23(2), pages 581-608, June.
  16. Donald Cox & Oded Stark, 1996. "Intergenerational Transfers and the Demonstration Effect," Boston College Working Papers in Economics 329., Boston College Department of Economics.
  17. Jellal, Mohamed & wolff, François charles, 2000. "Shaping intergenerational relationships the demonstration effect," MPRA Paper 38512, University Library of Munich, Germany.
  18. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
  19. Cameron, Lisa A. & Cobb-Clark, Deborah A., 2001. "Old-Age Support in Developing Countries: Labor Supply, Intergenerational Transfers and Living Arrangements," IZA Discussion Papers 289, Institute for the Study of Labor (IZA).
  20. Lisa Cameron & Deborah Cobb-Clark, 2008. "Do coresidency and financial transfers from the children reduce the need for elderly parents to works in developing countries?," Journal of Population Economics, Springer, vol. 21(4), pages 1007-1033, October.
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