On the demand for grandchildren: Tied transfers and the demonstration effect

Arbeitspapier

Most private giving between living generations takes the form of tied transfers, such as help with housing downpayments. We argue that parents provide help with downpayments in order to encourage the production of grandchildren, and that such a subsidization emanates from the demonstration effect: a child's propensity to furnish parents with attention and care can be conditioned by parental example. Parents who desire such transfers in the future have an incentive to make transfers to their own parents in order to instill appropriate preferences in their children. This generates a derived demand for grandchildren since potential grandparents will be treated better by their adult children if the latter have their own children to whom to demonstrate the appropriate behavior. Empirical work, based on waves 1 and 2 of the National Survey of Families and Households, indicates behavior consistent with subsidization of the production of grandchildren and the demonstration effect.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Reihe Ökonomie / Economics Series ; No. 158

Classification and Topics

• Classification: Wirtschaft ; Sociology of Economics ; Household Behavior: General ; Welfare, Well-Being, and Poverty: General ; Fertility; Family Planning; Child Care; Children; Youth ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
• Subject: intergenerational transfers ; the demonstration effect ; inculcating values in children ; subsidizing the production of grandchildren ; housing downpayments ; Generationenbeziehungen ; Kinder ; Familienökonomik ; Wohnungsbaufinanzierung ; Privater Transfer ; Konsuminterdependenz ; Schätzung ; Theorie ; USA ; Eltern

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cox, Donald ; Stark, Oded
• Event: Veröffentlichung
• (who): Institute for Advanced Studies (IHS)
• (where): Vienna
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/72264
• Last update: 10.03.2025, 11:44 AM CET