Consistent Motives for Inter-Family Transfers: Simple Altruism

The influence of the comparative economic status of elderly parents and their adult children on inter-vivos transfers and inheritance was analyzed. The 1992 Wisconsin Longitudinal Study interview provides new evidence that transfers from parents to mid-life adults are motivated by simple altruism, in contrast to other recent studies that support compensatory altruism or exchange motives. These results are based on income tax records for parents from the late 1950's and respondents' earnings reports for the mid-70's, and within-family analyses of sibling pairs and their income reports in the early 1990's. A policy implication is that government income redistribution will not affect how elderly parents provide financial transfers to their adult children.