Reciprocity with Two-sided Altruism in Intergenerational Transfers: Evidence from Indonesian Family Life Survey Data
The main purpose of this chapter is to examine the motive for investment by parents in the human capital of children. The difference between patterns of intergenerational transfers and investment in the human capital of children in developed countries on the one hand, and those of most of the developing countries on the other, is that while in all countries, parents invest substantial resources in the human capital of children, in less-developed countries we observe substantial resource transfers from children to parents but such transfers are much less observed in developed countries. These patterns of transfer are sometimes used to postulate the hypothesis that in less-developed countries, parental investment in their children is more like lending to children, since children cannot borrow from the private capital market to finance their education, whereas in developed countries, parental investment in their children is mainly due to parental altruism towards their children.
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