Is it true love? Altruism versus exchange in time and money transfers

This paper investigates what motivates intergenerational time andmoney transfers. We consider a model in which transfers may be drivennot only by altruism, but also by exchange considerations. We use datafrom SHARE to discriminate between the two motives. We show thatboth if we consider money transfers from parents to children and timetransfers from children to parents, the empirical evidence rejects pure altruism in favor of exchange. This result has important policy implications on the effectiveness of formal care provision as a substitute for informal care and on the impact of taxation on transfers.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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