Inter-Household private transfers and underlying motives : evidence for Bulgaria

Menezes, António Gomes de

http://hdl.handle.net/10400.3/1140

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Authors

Menezes, António Gomes de

Abstract(s)

The effects of interactions between private transfer behavior and income redistribution policies depend on the motives underlying private income transfers. This paper tests for two different potential motives: pure altruism versus simple exchange, in the presence of capital market imperfections. Using household survey data for Bulgaria, microeconometric evidence is found that both motives are in effect. We also find evidence that capital market imperfections are likely to be binding for consumption smoothing, and hence are an important cause of private transfers. The results indicate that social security benefits “crowd in” the incidence of private transfers, but not the amounts transferred.