Is There Such a Thing as a Family Constitution? A Test Based on Credit Rationing

29 Pages Posted: 30 May 2005

See all articles by Alessandro Cigno

Alessandro Cigno

Department of Economics and Management, University of Florence; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics; Centre for Household, Income, Labour and Demographic Economics (CHILD)

Gianna Claudia Giannelli

University of Florence - Dipartimento di Studi sullo Stato; IZA Institute of Labor Economics

Furio C. Rosati

United Nations - UCW Program; University of Rome Tor Vergata - Faculty of Economics

Daniela Vuri

University of Rome Tor Vergata; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: April 2004

Abstract

The paper aims to ascertain whether voluntary money transfers may be explained by the existence of self-enforcing family constitutions. We identify a circumstance in which an agent will behave differently if she is optimizing subject to a family constitution, than if she is moved by either altruistic or exchange motivations. The circumstance is the presence of a binding credit ration, which may raise the probability of making a money transfer (and the amount of money transferred) if a family constitution exists, but will have the opposite effect if the transfer is either a gift, or payments for services rendered. Allowing for possible endogeneity, we find that rationing has a positive effect on the probability of giving money, and on the amount given, if the potential giver is under the age of retirement and has children, but no significant effect if the person has no children, or is over the retirement age. This rejects the hypothesis that money transfers are motivated by either altruistic or straight exchange motives, but not the one that these transfers are governed by family constitutions.

Keywords: family constitution, altruism, exchange, private transfers, personal services

JEL Classification: D13, J13, J14

Suggested Citation

Cigno, Alessandro and Giannelli, Gianna Claudia and Rosati, Furio C. and Vuri, Daniela, Is There Such a Thing as a Family Constitution? A Test Based on Credit Rationing (April 2004). IZA Discussion Paper No. 1116; CEIS Working Paper No. 72. Available at SSRN: https://ssrn.com/abstract=533803

Alessandro Cigno (Contact Author)

Department of Economics and Management, University of Florence ( email )

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HOME PAGE: http://www.alessandrocigno.it/

CESifo (Center for Economic Studies and Ifo Institute)

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HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
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Centre for Household, Income, Labour and Demographic Economics (CHILD) ( email )

Turin, TO
Italy

Gianna Claudia Giannelli

University of Florence - Dipartimento di Studi sullo Stato ( email )

Via S. Caterina d'Alessandria 3
Firenze 50129
Italy
+39-055-4622926 (Phone)
+39-055-472102 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Furio C. Rosati

United Nations - UCW Program ( email )

ILO Office for Italy and San Marino
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I-00186 Rome
Italy

HOME PAGE: http://www.ucw-project.org

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy
6 2020 500 (Fax)

Daniela Vuri

University of Rome Tor Vergata ( email )

Via di Tor Vergata
Rome, Lazio 00133
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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