Between children and friends; Financial solidarity of family and friends in the Netherlands

Tomini, Florian and Borghans, Lex (2010). Between children and friends; Financial solidarity of family and friends in the Netherlands.

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  • Author Tomini, Florian
    Borghans, Lex
    Title Between children and friends; Financial solidarity of family and friends in the Netherlands
    Publication Date 2010
    Abstract People give and receive financial transfers both to their children and friends. This raises the question whether financial transfers to and from family and friends are related. Are people more likely to give to their friends if they give less to their children? Or, are people who receive money from one relation also more likely to receive money from others? And, does the relationship with friends change when people have children? In this paper we explore the simultaneity of the transfers to and from children and friends to improve our understanding of the motives for financial solidarity. To this aim we use data from Netherlands Kinship Panel Study 2005 in which respondents (here called anchors), reported the transfers with their children and friends. We first relate the likelihood of financial transfers to individual characteristics of both the anchor and respective donors or beneficiaries, and secondly investigate the correlations between each pairs of transfers for the main sample and different sub-groups. Our findings suggest that there exist a strong correlation between transfers to or from both children. A similar though weaker correlation is found when comparing relationships with children and friends simultaneously. In contrast with parent-child relationships we find a strong tendency for reciprocity between friends. With the increase of number of children reported, transfer reciprocity between anchors and their friends declines. Findings support ���warm glow�۪ related motives, and do not support the altruism hypothesis as the explanation for financial solidarity. JEL Classifications: D10, D19, D13, D64 Key words: financial solidarity, inter-vivo family transfers, altruism, reciprocity, warm glow
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    Created: Fri, 13 Dec 2013, 12:14:29 JST