On the effects of public and private transfers on

Authors: Miguel SánchezRomero Concepció Patxot Elisenda Rentería Guadalupe Souto

Publish Date: 2012/05/30

Volume: 26, Issue: 4, Pages: 1409-1430

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Abstract

Intergenerational transfers are a very important part of our daily economic activity These transfers whether familial or public may influence our economic decisions to the same extent that financial markets do In this paper we seek to shed some light on the effects of transfers on capital accumulation in the face of demographic aging In particular a general equilibrium overlapping generations model with realistic public and familial transfers drawn from the National Transfer Accounts project is implemented to Spain Given that in this case net familial transfers mainly go from parents to children while public transfers go from children to parents it is shown that the Spanish baby boom and baby bust could lead to capital depletion and a reduction in consumption per capitaThis work received institutional support from the Spanish Science and Technology System Projects No ECO200910003 and ECO200804997/ECON the Catalan Government Science Network Projects No SGR2009600 and SGR2009359 as well as from XREPP Xarxa de referència en Economia i Política Públiques the Fulbright Commission reference 20070445 the European Science Foundation 09ECRP021 and the Max Planck SocietyWe are extremely thankful to Ronald D Lee Andrew Mason Gretchen Donehower David Reher participants of various seminars/conferences and two anonymous referees for giving us very useful comments suggestions and ideas We have received helpful research assistance from Ignacio Moral and language editing from Miriam Hils Cosgrove We are also grateful to the Center on Economics and Demography of Aging and the Department of Demography at UC Berkeley for their hospitality

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