Intergenerational Altruism and Retirement Transfers: Evidence from the Social Security Notch

47 Pages Posted: 14 Sep 2020

Date Written: July 30, 2020

Abstract

I contribute new evidence on altruistic preferences in intergenerational transfers using variation in Social Security benefits induced by an inflation-indexing mistake. The instrument is most relevant for those with low education, so I focus on this group. I find support for pure altruism because individuals who received additional Social Security benefits passed on 15.4 percent to children via inter vivos transfers without receiving any additional care in return. On the contrary, children reduce caregiving monotonically with increases in parental Social Security benefits. Adult female children appear to be the most affected as they both receive monetary transfers and reduce caregiving.

Keywords: altruism, intergenerational transfers, Social Security, caregiving, HRS, Notch

JEL Classification: D14, D64, H55

Suggested Citation

Mukherjee, Anita, Intergenerational Altruism and Retirement Transfers: Evidence from the Social Security Notch (July 30, 2020). Available at SSRN: https://ssrn.com/abstract=3665484 or http://dx.doi.org/10.2139/ssrn.3665484

Anita Mukherjee (Contact Author)

Wisconsin School of Business ( email )

975 University Avenue
Madison, WI 53706
United States

HOME PAGE: http://www.anitamukherjee.com

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