Parental and public transfers to young women and their children.

Abstract

This paper presents estimates of how an increase in welfare benefits for the welfare-eligible affects the provision of parental support in the form of both financial transfers and shared residence based on an overlapping-generations framework incorporating game-theoretic interactions among parents their adult children and the government. The empirical results obtained from two longitudinal data sets indicate that the parents view a dollar of income earned by their daughters as equivalent to a dollar increase in welfare benefits. However there exists only a small trade-off between the generosity of government aid and the incidence of parental aid. Data are for the United States and are from the National Longitudinal Survey of Young Women for 1968-1984 and the National Longitudinal Survey of Youth for 1979-1984. (EXCERPT)