Compensatory Inter Vivos Gifts

Levy Institute Working Paper No. 319

Tinbergen Institute Discussion Paper No. 2007-074/3

Posted: 11 Jan 2001

See all articles by Stefan Hochguertel

Stefan Hochguertel

VU University Amsterdam; Tinbergen Institute

Henry Ohlsson

Uppsala University - Department of Economics

Date Written: September 2007

Abstract

Parents' transfer motives are important for understanding, e.g., macroeconomics, income (re)distribution, savings, and public finance. Using data from six biennial waves of the Health and Retirement Study 1992-2002, we estimate grouped tobit-type latent variable models with multi-level error components. First, we find that inter vivos transfers from parents to children are gifts, and not temporary help to overcome liquidity constraints. Second, inter vivos gifts are compensatory in the sense that life-time poorer children will receive higher transfers than their life-time richer siblings. Third, inter vivos gifts do not, however, make up the entire difference in life-time incomes.

Keywords: inter vivos gifts, compensatory transfers, liquidity constraints, altruism, exchange

JEL Classification: D100, D640, D910

Suggested Citation

Hochguertel, Stefan and Ohlsson, Henry, Compensatory Inter Vivos Gifts (September 2007). Levy Institute Working Paper No. 319, Tinbergen Institute Discussion Paper No. 2007-074/3, Available at SSRN: https://ssrn.com/abstract=256007 or http://dx.doi.org/10.2139/ssrn.256007

Stefan Hochguertel (Contact Author)

VU University Amsterdam ( email )

Dept Econ (FEWEB)
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1081HV Amsterdam
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+31 20 59 86033 (Phone)
+31 20 59 89870 (Fax)

Tinbergen Institute

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Henry Ohlsson

Uppsala University - Department of Economics ( email )

Box 513
Uppsala, SE-75120
Sweden
+46 18 471 51 04 (Phone)

HOME PAGE: http://www.uueconomics.se/henryo/

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