Estimating probit models, using family panels, we find that gifts are compensatory in the sense that a child is more likely to receive a gift if she works fewer hours and has lower income than than her brothers and sisters. These results carry over to the amounts given. Fixed effects Tobit estimations show that the fewer hours a child works and the lower her income is, the more the parents give.
Gifts are compensatory.
The empirical results are, therefore, consistent with the predictions of the altruistic model of intergenerational transfers. Before downloading any of the electronic versions below you should read our statement on copyright . Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.