The Effects of Income and Wealth on Time and Money Transfers between Parents and Children

Abstract

In this paper we study the effects of income and wealth on transfers of money and time between individuals and their parents and in-laws....We estimate the effects of incomes of siblings on the amounts received from parents and the amounts given to parents. We provide the first estimates of the effects of incomes of parents relative to the incomes of parents in-law on the amounts given and received by married couples. We study how the relative incomes of divorced parents affect transfers to and from such parents and their children. Finally we examine the interrelationship between time transfers and money transfers and examine the effects of distance on the two types of transfers. We attempt to draw out the implications of our results from alternative theories of transfers. Our analysis is based on the recently released transfer supplement to the 1988 [U.S.] Panel Study of Income Dynamics (PSID) along with matched panel data on the incomes wealth health status and family structure of a set of parents and their adult children. (EXCERPT)