TY  - JOUR
AU  - Altonji,Joseph G.
AU  - Hayashi,Fumio
AU  - Kotlikoff,Laurence
TI  - Parental Altruism and Inter Vivos Transfers: Theory and Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5378
PY  - 1995
Y2  - December 1995
UR  - http://www.nber.org/papers/w5378
L1  - http://www.nber.org/papers/w5378.pdf
N1  - Author contact info:
Joseph G. Altonji
Department of Economics
Yale University
Box 208264
New Haven, CT  06520-8264
Tel: 203/432-6285
Fax: 203/432-5591
E-Mail: joseph.altonji@yale.edu

Fumio Hayashi
Hitotsubashi University
Grad. School of International Corporate Strategy
2-1-2 Hitotsubashi, Chiyoda-ku
Tokyo 101-8439
JAPAN
Tel: 81-3-5841-5652
Fax: 1-801-469-0086
E-Mail: fumio.hayashi@gmail.com

Laurence J. Kotlikoff
Department of Economics
Boston University
270 Bay State Road
Boston, MA 02215
Tel: 617/353-4002
Fax: 617/353-4001
E-Mail: kotlikoff@gmail.com
AB  - This paper uses PSID data on the extended family to test whether inter vivos transfers from parents to children are motivated by altruism.  Specifically, the paper tests whether an increase by one dollar in the income of parents actively making transfers to a child coupled with a one dollar reduction in that child's income results in the parents increasing their transfer to the child by one dollar. This restriction on parental and child transfer-income derivatives is derived for the standard altruism model augmented to include uncertain and liquidity constraints.  These additional elements pin down the timing of inter vivos transfers.  The paper's method of estimating income-transfer derivatives takes into account unobserved heterogeneity across families in the degree of altruism.  The findings strongly reject the altruism hypothesis.  Redistributing one dollar from a recipient child to donor parents leads to less than a 13 cent increase in the parents' transfer to the child -- far less than the one dollar increase implied by altruism.
ER  -