Intervivos Giving Over the Lifecycle

47 Pages Posted: 17 Oct 2007 Last revised: 6 Dec 2011

See all articles by Michael D. Hurd

Michael D. Hurd

RAND Corporation; State University of New York at Stony Brook - College of Arts and Science - Department of Economics; National Bureau of Economic Research (NBER)

James P. Smith

RAND Corporation; IZA Institute of Labor Economics

Julie M. Zissimopoulos

University of Southern California - Sol Price School of Public Policy; The RAND Corporation; University of Southern California - Schaeffer Center for Health Policy and Economics

Date Written: October 1, 2011

Abstract

Inter-vivos cash transfers and bequests between family members total hundreds of billions of dollars each year. They may equalize resources within a generation of a family as well as across family generations. Transfers delayed to the end of life may represent a significant motive for saving. The authors use longitudinal data from the Health and Retirement Study on inter-vivos transfers that span up to twelve years to: describe financial transfers made by parents to children and their correlation with donor characteristics, examine age patterns in giving behavior, the persistence of transfers, and how transfers change in response to changes in marital status, economic status and health. Their empirical analysis is motivated by a dynamic life-cycle model with intervivos transfers as an argument in the utility function which generates hypotheses about the age pattern of transfers and how mortality risk, risk aversion and economic resources affect giving behavior.

Keywords: Intergenerational transfers, life-cycle consumption, household behavior

JEL Classification: D91, J14

Suggested Citation

Hurd, Michael D. and Smith, James P. and Zissimopoulos, Julie M., Intervivos Giving Over the Lifecycle (October 1, 2011). RAND Working Paper Series No. WR-524-1, Available at SSRN: https://ssrn.com/abstract=1022215 or http://dx.doi.org/10.2139/ssrn.1022215

Michael D. Hurd (Contact Author)

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State University of New York at Stony Brook - College of Arts and Science - Department of Economics ( email )

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James P. Smith

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Julie M. Zissimopoulos

University of Southern California - Sol Price School of Public Policy ( email )

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