The Nature of Two-Direction Intergenerational Transfers of Money and Time : An Empirical Analysis

This paper studies the nature and pattern of inter vivos two-sided intergenerational transfers of money and time between parents and adult children. We use an analytical model that incorporates altruistic and exchange behavior to describe the interaction between parents and their children. Using the 1988 cross-section of the PSID, we examine empirically the existence of altruism and exchange between two successive generations. The empirical findings support the notion that intergenerational transfers are motivated by altruism. They do not support the presence of an exchange motive.