Motives for private transfers over the life cycle: An analytical framework and evidence for Peru

Type Working Paper - Journal of Development Economics
Title Motives for private transfers over the life cycle: An analytical framework and evidence for Peru
Author(s)
Volume 55
Issue 1
Publication (Day/Month/Year) 1996
Page numbers 57-80
URL http://www.sciencedirect.com/science/article/B6VBV-3SXF5KX-3/2/b7787d383470cce481b9c371682a4527
Abstract
This paper tests for the motives for private income transfers. We consider two motives: altruism and exchange. The question of private-transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income. Using a household survey for Peru, we find that transfer amounts received increase with recipient pre-transfer income, which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange. We also find that capital market imperfections are likely to be an important cause of private transfers, and that social security benefits \"crowd out\" the incidence of private transfers.

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