Working Paper: NBER ID: w9745
Authors: Audrey Light; Kathleen McGarry
Abstract: Economists have invested a great deal of effort in trying to understand the motivation for family transfers, yet recent empirical work testing the seemingly appealing models of altruism and exchange has led to decidedly mixed results. A major stumbling block has been the lack of adequate data. We take a fresh look at the issue using responses to an innovative survey question that directly asks mother about the planned division of their estates. We find that both altruism and exchange are frequently offered as explanations of behavior and are of nearly equal importance. Furthermore, the explanations are consistent with observable characteristics of the mother, lending support to the validity of the question. We also find that among step or adopted families, genetic ties play an important role. Because motivating factors appear to differ across families the lack of a consensus among previous researchers about motives ought not to be surprising.
Keywords: family transfers; bequests; altruism; exchange; evolutionary motives
JEL Codes: D1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Mothers' health status (I14) | Bequest intentions (D64) |
| Biological status of children (J13) | Bequest intentions (D64) |
| Predicted incomes of children (I24) | Bequest intentions (D64) |
| Mother's assessment of child's financial status (D19) | Bequest intentions (D64) |
| Services provided by children (J13) | Bequest intentions (D64) |
| Biological ties (J12) | Bequest intentions (D64) |