Private Intergenerational Transfers and Population Aging

In the forthcoming decades the industrialized countries will experience a demographic transition that is unprecedented in history. While the transition's impact on public pension schemes has extensively been examined, its implication for private intergenerational transfers has gone almost unnoticed by the literature. This study attempts to make up for that gap in the literature. It gives a comprehensive overview of private transfer patterns in Germany, extends the methodology of generational accounting to include private intergenerational transfers, and presents a computable general equilibrium model that for the first time allows to analyze various bequest motives in a unified framework.

Includes supplementary material: sn.pub/extras

Inhalt

1. Introduction.- 2 Motives for Private Intergenerational Transfers.- 2.1 Altruistic Transfers.- 2.2 Accidental Bequests.- 2.3 Transfers as Exchange.- 2.4 Transfers for Joy-of-Giving.- 2.5 Empirical Evidence.- 3. Empirical Facts About Transfers in Germany.- 3.1 The Income and Expenditure Survey 1993.- 3.2 The Socio-Economic Panel.- 4. Private versus Public Transfers During a Demographic Transition.- 4.1 The Demographic Transition.- 4.2 What Demographics Reveal About Public and Private Transfers.- 4.3 The Impact of the Transfer Motive.- 4.4 A Generational Accounting Approach.- 5. Intergenerational Transfers in a General Equilibrium Setting.- 5.1 The Model.- 5.2 Private Transfers, Demographic Transition, and Generational Welfare.- 5.3 Intergenerational Transfer Accounting and General Equilibrium.- 5.4 The Taxation of Private Intergenerational Transfers.- 6. Summary.- A. Appendix.- A.1 The Implications of Altruistic Bequests.- A.2 The Impact of Social Security on Accidental Bequests.- A.4 Sensitivity Analysis of Public and Private Accounts.- A.5 The Unified General Equilibrium Model.- A.6 Bequests-as-Exchange and Lump-Sum Taxation.- A.7 The Derivation of Future Generations' Public Generational Account.- A.8 The Derivation of the Life-Cycle Budget Constraint in Terms of an Average Individual.- A.9 The Calculation of Future Generations' Total Generational Account.- A.10 The Equivalence of GAt+l,t+1 and TTt+i,t+1 under Steady State Conditions.- A.11 The Equivalence of Extended Generational Accounting and the Back-of-the-Envelope Calculation.- A.12 Complete Simulation Results.- References.