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

Economica 81, October 2014, pp.721-746

Posted: 7 Feb 2013 Last revised: 7 Oct 2014

Kristopher Gerardi

Federal Reserve Bank of Atlanta

Yuping Tsai

Centers for Disease Control and Prevention (CDC)

Multiple version iconThere are 2 versions of this paper

Date Written: March 23, 2013

Abstract

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

Suggested Citation

Gerardi, Kristopher and Tsai, Yuping, The Effect of Social Entitlement Programs on Private Transfers: New Evidence of Crowding Out (March 23, 2013). Economica 81, October 2014, pp.721-746. Available at SSRN: https://ssrn.com/abstract=2212867 or http://dx.doi.org/10.2139/ssrn.2212867

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)

Centers for Disease Control and Prevention (CDC) ( email )

1600 Clifton Road NE, MS A19
Atlanta, GA 30329
United States

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