An Experimental Study on the Crowding-Out Effect of Public Transfers in a Model with Multiple Families

CentER Working Paper No. 2000-54

29 Pages Posted: 12 Dec 2000

See all articles by Werner Guth

Werner Guth

Max Planck Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Theo Offerman

University of Amsterdam - Faculty of Economics & Econometrics (FEE)

Johannes (Jan) J. M. Potters

Tilburg University - CentER

Martin Strobel

Maastricht University - Department of Economics; Maastricht University - International Institute of Infonomics

Harrie A. A. Verbon

Tilburg University - CentER; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 2000

Abstract

We study an overlapping-generations experiment with multiple families in which redistributional transfers can take the form of support to the elderly or grants to children. Supporting the old is a purely inter-generational (intra-family) transfer, whereas grants to children also involve an element of intra-generational (inter-family) solidarity. Our treatment variable is the tax rate determining the amount of redistribution by means of the compulsory pension scheme. We investigate to which degree compulsory solidarity crowds out voluntary solidarity. We also consider whether voluntary solidarity relies more on grants to children or on support to the old aged, and the mechanisms which are used in eliciting transfers from family members from other generations.

Keywords: Within-Family Transfers, Overlapping Generations, Redistributive Public-Pension System, Crowding Out of Private Transfers, Reciprocity

JEL Classification: C91, H55

Suggested Citation

Güth, Werner and Offerman, Theo and Potters, Johannes (Jan) J. M. and Strobel, Martin and Verbon, Harrie A. A., An Experimental Study on the Crowding-Out Effect of Public Transfers in a Model with Multiple Families (April 2000). CentER Working Paper No. 2000-54. Available at SSRN: https://ssrn.com/abstract=246965 or http://dx.doi.org/10.2139/ssrn.246965

Werner Güth

Max Planck Institute of Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Theo Offerman

University of Amsterdam - Faculty of Economics & Econometrics (FEE) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 4294 (Phone)
+31 20 525 5283 (Fax)

Johannes (Jan) J. M. Potters

Tilburg University - CentER ( email )

Department of Economics
P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 8204 (Phone)
+31 13 466 3042 (Fax)

Martin Strobel

Maastricht University - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 (0)43 38-83646 (Phone)
+31 (0)43 38-84878 (Fax)

HOME PAGE: http://Martin.Strobel.infonomics.nl

Maastricht University - International Institute of Infonomics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 (0)43 38-83885 (Phone)
+31 (0)43 38-84905 (Fax)

HOME PAGE: http://Martin.Strobel.infonomics.nl

Harrie A. A. Verbon (Contact Author)

Tilburg University - CentER ( email )

Department of Economics
P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 28 78 (Phone)
+31 13 466 30 42 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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