On May 20, 2016, 12.00-13.00, Dr. Patricia De Micco (University of Siena, INPS, & University of Insubria) will give a talk on “Home Made Welfare: The Role of Pensions in Intergenerational Transfers. Evidence from Italy” (joint with Vincenzo Scrutinio).
How relevant is pension income in determining the occurrence of intergenerational family transfers? Using data from the Bank of Italy’s Survey on Household Income and Wealth, this paper provides an empirical investigation of family intergenerational monetary transfers. We investigate the occurrence of donations when the donor is a family member and expects no repayment to take place. We distinguish between interhousehold and intrahousehold transfers and analyse the role of income deriving from pension benefits in affecting the probability of both transfers to occur. Results clearly point out that pension income positively and significantly affects the probability for the family to make both interhousehold and intrahousehold transfers. For instance, when in the household only one pensioner is present, the probability of a interhousehold transfer increases by 2.2%; in addition, we identify the presence of nonlinearities in this effect. Since our dataset does not provide precise information on intrahousehold transfers, we study the probability for a person aged between 25 and 50 years to live together with a person older than 60, assuming that, when this happens, the old individual provides economic support to the younger one and gives rise to intrahousehold transfers. The role of pensions is crucial: the number of pensions perceived by the younger individual’s parents has a positive and significant effect. In particular, if there is only one parent who receives a pension benefit, the increase in the probability of cohabitation ranges between 9% and 11%..