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Are Family Transfers Crowded Out by Public Transfers?
Author(s) -
GÜth Werner,
Offerman Theo,
Potters Jan,
Strobel Martin,
Verbon Harrie A. A.
Publication year - 2002
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00303
Subject(s) - reciprocity (cultural anthropology) , redistribution (election) , transfer (computing) , economics , labour economics , pension , child support , welfare , demographic economics , social psychology , psychology , political science , law , finance , market economy , politics , parallel computing , computer science
We give an account of an overlapping–generations experiment with multiple families in which voluntary transfers can take the form of support to the elderly or grants to children. Support to the old is a purely intergenerational (intra–family) transfer, whereas grants to children also involve an element of intra–generational (inter–family) redistribution through a compulsory pension system. Our data show that higher compulsory inter–family transfers lead subjects to place relatively more emphasis on support instead of grants: grants are crowded out, but support is not significantly affected. The efficiency of voluntary transfers increases, however. Furthermore, if subjects give transfers, they do not use tokens of direct reciprocity; evidence of indirect reciprocity in transfer behavior can only be obtained for the case where compulsory transfers are high. JEL classification : C 91; H 55