Is There Such a Thing as a Family Constitution? A Test Based on Credit Rationing
Dipartimento di Studi sullo Stato; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA); Centre for Household, Income, Labour and Demographic Economics (CHILD)
Gianna Claudia Giannelli
University of Florence - Dipartimento di Studi sullo Stato; Institute for the Study of Labor (IZA)
Furio C. Rosati
United Nations - UCW Program; University of Rome II - Faculty of Economics
University of Rome Tor Vergata; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
IZA Discussion Paper No. 1116; CEIS Working Paper No. 72
The paper aims to ascertain whether voluntary money transfers may be explained by the existence of self-enforcing family constitutions. We identify a circumstance in which an agent will behave differently if she is optimizing subject to a family constitution, than if she is moved by either altruistic or exchange motivations. The circumstance is the presence of a binding credit ration, which may raise the probability of making a money transfer (and the amount of money transferred) if a family constitution exists, but will have the opposite effect if the transfer is either a gift, or payments for services rendered. Allowing for possible endogeneity, we find that rationing has a positive effect on the probability of giving money, and on the amount given, if the potential giver is under the age of retirement and has children, but no significant effect if the person has no children, or is over the retirement age. This rejects the hypothesis that money transfers are motivated by either altruistic or straight exchange motives, but not the one that these transfers are governed by family constitutions.
Number of Pages in PDF File: 29
Keywords: family constitution, altruism, exchange, private transfers, personal services
JEL Classification: D13, J13, J14working papers series
Date posted: May 30, 2005
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