Two-sided altruism as a motive for intergenerational transfer

Abstract This paper reconsiders the role of altruism as a motive for an intergenerational transfer and characterizes the relationship between intergenerational transfers and altruism. The main finding is that transfers to children do not disappear even if altruism from parents to children weakens. The paper also shows that as altruism from children to parents becomes stronger, a transfer to children initially decreases and then increases once the degree of altruism is beyond a certain level; in other words, transfers may increase even if altruism from the transferee to the transferor becomes stronger. These findings sharply contrast with the common assumption in the existing literature that an intergenerational transfer is motivated by altruism from the transferor to the transferee.