The Division of Parental Transfers in Europe

25 Pages Posted: 28 Sep 2011

See all articles by Javier Olivera

Javier Olivera

LISER; KU Leuven, Department of Economics

Date Written: August 14, 2011

Abstract

In the extensively studied equal division puzzle, one finds very large shares of equal bequests and unequal inter-vivos transfers given to adult children. However, such puzzle is less evident in Europe as we find a higher prevalence of parents giving equal inter-vivos transfers. We argue that altruistic parents are also concerned with norms of equal division. Thus, parents do not fully offset child income inequality. The parents start to give larger transfers to poorer children if the child income inequality becomes unbearable from the parent’s view. We find econometric evidence for this behavior using microeconomic data of 12 European countries from the two waves of the Survey of Health, Aging, and Retirement in Europe (SHARE).

Keywords: inter-vivos transfers, altruism, equal division

JEL Classification: D19, D64, J18

Suggested Citation

Olivera, Javier, The Division of Parental Transfers in Europe (August 14, 2011). Available at SSRN: https://ssrn.com/abstract=1934159 or http://dx.doi.org/10.2139/ssrn.1934159

Javier Olivera (Contact Author)

LISER ( email )

11 Porte des Sciences Campus Belval
Maison des Sciences Humaines
Esch-sur-Alzette, L-4366
Luxembourg

HOME PAGE: http://https://sites.google.com/site/javierolive/

KU Leuven, Department of Economics ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

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