The proposed research addresses the following question: What is the motivation for intergenerational income transfers among family members? Two possible motives are considered--altruism and exchange. Parents might give to their adult children out of altruism. They care about them and derive vicarious satisfaction from giving. Alternatively, donors could expect something in return for their transfers, such as attention, companionship, or emotional support. These exchanges might be contemporaneous or part of a long-term contract. The question of private-transfer motives is important, because they can determine the outcomes of public-redistribution policies. But our knowledge of how private transfers respond to economic conditions is quite limited, due to scarcity of data. Transfer behavior is modeled under alternative motives--altruism and exchange--and implications amenable to empirical testing are derived. The National Survey of Families and Households (NSFH) will be used to investigate empirically the motives for private transfers. The NSFH has information on both private financial intergenerational transfers and in- kind, service-related transfers, such as caregiving and contact. The data set contains comprehensive information on family structure and living arrangements, in addition to labor market, demographic, and consumer- balance-sheet information. All are relevant to the question of transfer motives. To supplement the empirical work with the NSFH, a small, in depth survey will be conducted to capture the more subtle aspects of intergenerational transfers. The empirical results will give insights into the reasons private inter- generational transfers occur, and contribute to our understanding of the interplay between public and private transfers.
