The Effect of Social Entitlement Programs on Private Transfers: New Evidence of Crowding Out

Kristopher Gerardi

Federal Reserve Bank of Atlanta

Yuping Tsai

Carter Consulting Inc.

March 23, 2013

Forthcoming in Economica

This paper exploits a policy experiment to identify the crowding out effects of public transfers on the incidence and level of private transfers. The introduction of a large social security program in Taiwan is used to estimate the effect of an exogenous increase in government transfer payments to the elderly on the private transfer behavior of their adult children. Using an instrumental variables strategy that accounts for the endogeneity of receiving public transfers, the empirical results show some evidence of crowding out on the extensive margin of private transfers.

Keywords: crowding out, private transfers, Social Security

JEL Classification: I3, J1, H55

Accepted Paper Series

Not Available For Download

Date posted: February 7, 2013 ; Last revised: January 22, 2014

Suggested Citation

Gerardi, Kristopher and Tsai, Yuping, The Effect of Social Entitlement Programs on Private Transfers: New Evidence of Crowding Out (March 23, 2013). Forthcoming in Economica. Available at SSRN: http://ssrn.com/abstract=2212867 or http://dx.doi.org/10.2139/ssrn.2212867

Contact Information

Kristopher S. Gerardi
Federal Reserve Bank of Atlanta ( email )
1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8561 (Phone)
HOME PAGE: http://sites.google.com/site/kristophergerardishomepage/
Yuping Tsai (Contact Author)
Carter Consulting Inc. ( email )
2310 Parklake Dr NE
Suite 535
Atlanta, GA 30345
United States
HOME PAGE: http://sites.google.com/site/yupingt/
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