Intergenerational Transfer Dynamics in Household Economics

Intergenerational transfer dynamics refer to the mechanisms by which resources—financial assets, human capital and social networks—flow between family generations. Two principal theoretical frameworks guide analysis: the life-cycle hypothesis, which models transfers as altruistic bequests designed to smooth consumption and welfare over a lifetime, and the exchange model, which interprets transfers as strategic investments aimed at eliciting future support or services. Empirical work examines a wide array of transfers, from parental spending on education and health to direct cash gifts and end-of-life bequests. These flows shape wealth accumulation, consumption patterns and inequality across cohorts. Demographic factors such as longevity and fertility, institutional settings like inheritance taxation and welfare provision, and cultural norms around filial obligation all influence the timing and magnitude of transfers. Cross-national comparisons highlight how variations in social policy and household structure produce distinct transfer profiles. Insights into these dynamics inform tax policy, pension design and social welfare programmes, with the aim of promoting intergenerational equity and economic resilience in ageing societies. Recent studies also underscore the importance of non-financial endowments—cognitive skills, social capital and professional networks—in sustaining mobility, emphasising the multifaceted nature of household transfers and their global socio-economic significance.

Research from Nature Portfolio

No recent Nature Portfolio content available.

Intergenerational Transfer Dynamics in Household Economics publication trend

The graph below shows the total number of articles in intergenerational transfer dynamics in household economics across all publications each year (not limited to Nature Index journals).

Technical terms

Bequest motive: The underlying reason prompting individuals to leave assets to heirs, typically modelled as altruistic or strategic.

Life-cycle hypothesis: A theory positing that individuals plan savings and transfers to smooth consumption over their lifetime and provide for their successors.

Exchange model: A framework in which transfers are viewed as reciprocal investments intended to elicit future services or support.

Inter vivos transfer: A gift or transaction of assets made by an individual to another during their lifetime rather than at death.

References

1. Unequal bequests. European Economic Review (2023).
2. Unequal but just? Experimental evidence on (gendered) distributive justice principles in parental financial gifts. Socio-Economic Review (2022).