Upstream Intergenerational Transfers

37 Pages Posted: 17 Nov 1997

See all articles by Frank A. Sloan

Frank A. Sloan

Duke University - Center for Health Policy, Law and Management; Duke University, Fuqua School of Business-Economics Group; Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Harold H. Zhang

University of Texas at Dallas - Naveen Jindal School of Management; China Academy of Financial Research (CAFR)

Date Written: September 1995

Abstract

This study analyzes upstream intergenerational transfers from middle-aged children to their elderly parents. We formulate a model in which the middle-aged child transfers both money and time to an elderly parent, based on an altruistic motive. We test the altruistic assumption empirically and examine substitution between financial transfers and time transfers using data from the Health and Retirement Survey (HRS). Empirical results support the assumption that upstream transfers are motivated by altruism, particularly financial transfers. Poor parents receive more money. Overall, the results of time transfers provide less strong support for our model. A child with a high wage tends to transfer money rather than time. Our findings on time transfers differ from predictions of models based on exchange motives. Public subsidies of nursing home care crowd out both private financial and time transfers.

JEL Classification: D64, I38, J14

Suggested Citation

Sloan, Frank A. and Zhang, Harold Huibing, Upstream Intergenerational Transfers (September 1995). Available at SSRN: https://ssrn.com/abstract=31755 or http://dx.doi.org/10.2139/ssrn.31755

Frank A. Sloan (Contact Author)

Duke University - Center for Health Policy, Law and Management ( email )

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Duke University, Fuqua School of Business-Economics Group ( email )

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Harold Huibing Zhang

University of Texas at Dallas - Naveen Jindal School of Management ( email )

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China Academy of Financial Research (CAFR)

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