An In-Depth Look Into Intergenerational Flows

Abstract

The goal of this paper is to carefully document the characteristics of within-family monetary transfers in the United States, using all nine waves of the Health and Retirement Study (HRS). The main purpose of doing so is to summarize the relevant moments that can be used as calibration targets by macro studies. As of now, most macroeconomic models have omitted within-family transfers from their consideration. While this choice is innocuous for many studies, for others, such as those studying public policy reforms, or the effect of demographic changes on macroeconomic outcomes, omitting within-family transfers may significantly bias the results. One reason why it has been difficult to incorporate intergenerational transfers into these frameworks is the lack of well-documented transfer characteristics that could be used as calibration targets. In fact, the existing studies based on HRS usually aim to disentangle transfer motives and focus on just a couple of HRS waves, reporting only the estimated coefficients for their empirical models.