Advertisement

Reciprocity with Two-sided Altruism in Intergenerational Transfers: Evidence from Indonesian Family Life Survey Data

  • Lakshmi K. Raut
  • Lien H. Tran
Chapter
Part of the International Economic Association Series book series (IEA)

Abstract

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.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Altonji, J. G., Hayashi, F. and Kotlikoff, L. J. (1992). ‘Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data’, American Economic Review, vol. 82, no. 5, pp. 1177–98.Google Scholar
  2. Becker, G. S. (1974) ‘A Theory of Social Interactions’, Journal Political Economy, vol. 82, no. 6, pp. 1063–93.CrossRefGoogle Scholar
  3. Becker, G. S., Murphy, K. M. and Tamura, R. (1990) ‘Human Capital, Fertility and Economic Growth’, Journal of Political Economy, vol. 98, pp. S12–S37.CrossRefGoogle Scholar
  4. Behrman, J. R., Pollack, R. A. and Taubman, P. (1982) ‘Parental Preferences and Provision for Progeny’, Journal of Political Economy, vol. 90, no. 1, pp. 52–73.CrossRefGoogle Scholar
  5. Bernheim, B. D., Shleifer, A. and Summers, L. H. (1985) ‘The Strategic Bequest Motive’, Journal of Political Economy, vol. 93, no. 6, pp. 1045–76.CrossRefGoogle Scholar
  6. Cox, D. (1990) ‘Intergenerational Transfers and Liquidity Constraints’, Quarterly Journal of Economics, vol. 105, no. 1, pp. 187–217.CrossRefGoogle Scholar
  7. Cox, D. and Rank, M. R. (1992) ‘Inter-vivos Transfers and Intergenerational Exchange’, Review of Economics and Statistics, vol. 74, no. 2, pp. 305–14.CrossRefGoogle Scholar
  8. Hayashi, F. (1995) ‘Is the Japanese Extended Family Altruistically Linked? A Test Based on Engel Curves’, Journal of Political Economy, vol. 103, no. 3, pp. 661–74.CrossRefGoogle Scholar
  9. Lillard, L. A. and Willis, R. J. (1996) ‘Motives for Intergenerational Transfers: Evidence from Indonesia and Malaysia’, European Society for the Study of Population Economics, 10th Annual Meeting, Uppsala, Sweden.Google Scholar
  10. McGarry, K. and Schoeni, R. F. (1995) ‘Transfer Behavior in the Health and Retirement Study: Measurement and the Redistribution of Resources Within the Family’, Journal of Human Resources, vol. 30, pp. S184–226.CrossRefGoogle Scholar
  11. Mincer, J. (1974) Schooling, Experience and Earnings, New York: NBER Columbia University Press.Google Scholar
  12. Nerlove, M. and Raut, L. K. (1997) ‘Growth Models with Endogenous Population: A General Framework’, ch. 20 in M. R. Rosenzweig and O. Stark (eds), Handbook of Population and Family Economics, vol. IB, New York: Elsevier.Google Scholar
  13. Raut, L. K. (1990) ‘Capital Accumulation, Income Distribution and Endogenous Fertility in an Overlapping Generations General Equilibrium Model’, Journal of Development Economics, vol. 34, nos 1/2, pp. 123–50.CrossRefGoogle Scholar
  14. Raut, L. K. (1997) ‘Learning to Perfect Manipulation: Implications for Fertility Savings, and Old-age Security’, mimeo, University of Hawaii.Google Scholar
  15. Willis, R. (1986) ‘Wage Determinants: A Survey and Reinterpretation of Human Capital Earnings Functions’, ch. 10 in O. Ashenfelter and R. Layard (eds), Handbook of Labor Economics, vol. 1, Amsterdam: Elsevier.Google Scholar

Copyright information

© International Economic Association 2000

Authors and Affiliations

  • Lakshmi K. Raut
    • 1
  • Lien H. Tran
    • 2
  1. 1.University of ChicagoUSA
  2. 2.Federal Trade CommissionUSA

Personalised recommendations