Intergenerational Resource Transfers

views updated


The transfer of resources between individuals of different generations occurs on both the societal level, as the outcome of public policy or within the context of the private sector, and the family level, as in the exchange of emotional support and material goods. This discussion of the intergenerational exchange of resources will consider, first, the flow of resources within the context of the family; second, intergenerational transfers on the societal level; and last, the issue of equity in the transfer of resources intergenerationally. In addition, brief mention will be made of special circumstances, such as cross-cultural differences or the special case of divorce and stepfamilies.

The meaning of the word generation varies from setting to setting. In the family environment, the reference is primarily to lines of descent (grandparents, parents, children, etc.). However, each family member is also a member of a particular birth cohort, or group of individuals born during the same period of historical time, such as 1920–1924, and, at any given time, a member of a particular age group, such as sixty-five- to sixty-nine-year-olds. Each of these is also reflected in the intergenerational exchange within the context of the family and in the intergenerational exchange of a society's resources. Finally, the exchange process may also include the concept of generation that connotes a group of individuals, usually part of the same birth cohort, who share a common set of political or social beliefs (e.g., the "Woodstock Generation").


Resources exchanged among family members vary greatly in size and type. Examples range from the ordinary, everyday exchange of care involved in child rearing or household chores to the bequest of substantial financial or material resources to descendants in a will. The latter behavior has been explored as part of a broader practice referred to as a "legacy" (Kane 1996), which includes last wills and testaments, the transfer of property, and, even more broadly, how people want to be remembered.

Over the last several decades a number of perspectives have developed regarding such familial exchanges. One such perspective views the resource-transfer process in terms of reciprocity of exchanges among family members. Analysts have examined reciprocity as a motivator of interdependence over time, at different points in the family structure (e.g., parent–child, sister–brother), and within the context of individual family members' perceptions of how much each member has given or received in the past. Exchange theory specifically views all kinds of social interactions as the exchange of rewards between individuals where the group or individual with the greater amount of social power regulates the exchange process (Dowd 1975). Regarding resources to older family members, Horowitz and Shindelman (1983) view reciprocity in terms of the "credits earned" by the older individual for providing resources in the past to the family member currently on the giving end.

In contrast, the life-cycle model of family intergenerational transfers maintains that the distribution of resources among the generations in the family takes on a curvilinear shape: Individuals in the middle generations, and most likely middle-aged, transfer the bulk of family resources to those who are either younger or older. (For an illustration, see the works of Reuben Hill [1965, 1970] regarding his study of three-generational families in the Minneapolis–St. Paul area). In contrast, the role continuity model of family intergenerational transfers asserts that, except in families where the older generations are financially strained, older family members redistribute their wealth to successive generations in the family (for further discussion, see Covey 1981; Kalish 1975; Riley and Foner 1971). Still another perspective used to explore the giving and receiving of resources in the family is that of hierarchical/sequential activities. From this perspective, individuals first seek aid from members of their nuclear family; failing that, from members of their extended family; and, only as a last resort, from institutional sources such as government programs, banks, and the educational system (viz., Morgan 1983). A final perspective is that of altruism. Altruism is a helping behavior that benefits the recipient but provides no benefits, and may incur costs, to the provider. In this context, then, resources are transferred from one generation to another with regard only to the benefit they provide to the recipient, without regard to the costs incurred by the provider. Research has investigated the relative importance of exchange versus altruism as motivators for intergenerational transfers (Cox and Jakubson 1995; Cox and Rank 1992; Schoeni 1997). This research finds that intergenerational transfers are more likely to be part of an exchange process rather than behaviors conducted out of altruism.

A great variety of resources, both material and psychosocial in nature, are exchanged among members of nuclear and extended families. These include the giving and receiving of material gifts of all manner and size; the provision of help during emergencies, as when a family member is ill or in need of sudden and immediate shelter; providing physical or financial resources in time of need, such as babysitting or nursing, offering advice, taking care of household maintenance, and providing financial support; the passing on of family legacies, including pictures, artifacts, recipes, and family lore; and inheriting assets of all kinds upon the death of family members.

In Western societies prior to industrialization, inheritance was a mechanism for passing on from father to son the means of family economic support, the farm or business (milling, smithing, etc.) that traditionally remained within the family for generations. With the arrival of industrialization and the movement of economic support to the factory or the office, the content and impact of inheritance grew more varied. While monetary and property assets are still very common, items with more symbolic significance, such as mementos or heirlooms, are often the most cherished (Rosenfeld 1979; Schorr 1980; Sussman et al. 1970).

The provision of care to family members is a resource transfer that occurs in every emotionally healthy family the world over. Most caregiving involves the many ordinary, everyday activities that are necessary to the survival and well-being of family members, for example, the typical care and feeding of infants and children, the performance of daily chores and house repairs, the giving of advice and emotional support, and the nursing of relatives during episodes of acute illness. In some instances family members give or receive care for conditions that are quite taxing and of an indefinite duration, such as Down's syndrome in a child or Alzheimer's disease or physical impairment or frailty in a spouse or older parent.

The intergenerational nature of this transfer is underscored in data from numerous studies, including nationally representative surveys, such as the one conducted by Louis Harris and Associates (1975) in conjunction with the National Council on the Aging, as well as many studies of family caregiving, including the National Long-Term Care Survey and the Longitudinal Survey of Aging. The general findings of this research indicate that the vast majority (perhaps as many as 80 percent) of older adults who need help with activities of daily living receive such help from relatives, particularly children or grandchildren (Stone et al. 1987; Stull 1995). A variety of motives for such care provision have been explored. Biegel and associates (1991) suggest that there are two types of explanations for the motives to provide care. Egoistic explanations argue that helping others is done with the anticipation that rewards will be forthcoming for such care provision. This includes payment for care, avoiding censure, gaining social approval, or complying with social norms. Some evidence for payments for care yields inconclusive results. For example, McGarry and Schoeni (1997) report that they found no evidence that parents provide financial assistance to their children in exchange for caregiving. On the other hand, Lillard and Willis (1997) report that in Malaysia, a country with neither Social Security nor Medicare, children are an important source of financial security in old age and that this is, in part, a repayment for parents' investments in children's education. They find further that parents and children engage in the exchange of time help for money.

A second set of explanations for providing care encompasses empathy and altruism. In these motivations, the interest is in benefiting the other, not oneself. As noted earlier, altruistic explanations of intergenerational transfers have not found much empirical support.

Noninheritance economic transfers within the family take a variety of forms: gifts, loans, payment of bills or down payments, and emergency financial help, for example. The directionality of this assistance, in both nuclear and extended families, is from parents of all ages to children of all ages and from adult children to older parents. Evidence (Schoeni 1997) indicates that people in their twenties and thirties receive more time and money assistance than do people of other ages, including the very old.

The transfer of goods and services among family members includes sharing the same household; making major purchases such as furniture, a car, or a large appliance; making smaller purchases such as clothing; and doing major repairs. Data show that substantial intergenerational transfers occur. For example, 90 percent of those Americans 65 years of age and older who had children or grandchildren gave those offspring gifts, while between 92 percent and 96 percent of adults 18 to 64 years old gave gifts to parents or grandparents (Harris and Associates 1975).


On the societal level, the concept of intergenerational transfers shifts from resource exchanges among specific individuals of the same lineage to transfers to and from large groups of people of one birth cohort or age group to large groups of people in the same or other birth cohort or age group. These exchanges take place in several arenas: (1) the public policy arena, where the transfer is usually in the form of resources defined in statutes and laws (examples in the United States include the Social Security system, Head Start, Temporary Assistance to Needy Families, school bonds); (2) the private sector, where transfers are in the form of wages or goods (examples include jobs that support workers and nonworkers, corporate profits that supply tax revenue); and (3) the creative arena (examples of these transfers include art, music, literature, and the fruits of social and physical science research).

Products of Public Policy. The outcomes of public policy are transfers that affect everyone in a society. Frequently, these resources are multifaceted, affecting a broad range of individuals. For instance, in the United States the term Social Security is commonly used to refer to Old-Age and Survivors Insurance retirement income and the death survivors' component of a larger piece of legislation that also includes a disability insurance program, an unemployment insurance component, and the public assistance Supplemental Security Income program. As a totality, then, these components of the Social Security legislation go to a wide range of individuals in a number of different circumstances. Moreover, it is important to note that, while resources stemming from public policy may be received by specific individuals at a particular point in time or over a particular span of time, in another sense each has a larger impact that far exceeds that exchange. For example, the issuance of a school bond in a community directly and immediately provides educational resources to a particular cohort of school-age residents. However, indirectly, those resources affect the lives of other members of the family, resulting in improved quality of life for them as well. Additionally, from a longitudinal perspective, the resources invested in educational infrastructure and materials benefit future generations of the community's students.

Discussion about the relative contribution of public and private transfers has led to conflicting expectations. For example, if one expects altruistic motivations, then private transfers would neutralize the impact of public transfers. On the other hand, if exchange motivates transfers, then private transfers would reinforce the effects of public transfers on economic well-being. Cox and Jakubson (1995) find that private transfers can enhance public transfers, the reverse of previous expectations that public transfers merely supplant private ones.

Outcomes of the Private Sector. Intergenerational resource transfers resulting from private sector activity affect both the active working population, composed of individuals who are primarily in their young adult and middle years, and the socalled dependent population, composed of children and older people supported by the active working population. This transfer occurs through both the wages that workers earn and the tax revenues, funneling through the public sector, those workers provide. The precise age boundaries for these classifications vary from society to society according to culture and the primary means of economic support (agricultural or industrial). However, even within the age span of the active working population, one finds individuals who are part of the dependent population, such as those who are disabled or unemployed in their age groups. Moreover, within the age span of the dependent population, one finds working school-age children and retirees working part-time or part-year.

In the United States, the total dependency ratio is generally considered to be the number of persons under eighteen and those age sixty-five and over (together, the two dependent populations) for every 100 working-age individuals eighteen to sixty-four years of age. The youth dependence ratio is generally the number of persons under eighteen for every 100 individuals eighteen to sixty-four, while the old-age dependency ratio is the number of persons sixty-five and older for every 100 persons eighteen to sixty-four years of age. In the United States, while the youth dependency ratio has declined from 51 in 1950 to 34 in 1994, the old-age dependency ratio climbed from 13.3 in 1950 to 20 in 1994. Additionally, the old-age dependency ratio is expected to increase to 37 by 2030, at the height of the so-called baby boom retirement years (U.S. Bureau of the Census 1996).

However, none of these ratios take into consideration the possible impact of the following on intergenerational resource transfers: (1) the current and future contributions of elderly persons and youth who are employed; (2) the potential for increased labor-force participation among those sixty-five and older; (3) the changes in the Social Security Act to gradually increase the age of eligibility for full Social Security retirement benefits to sixty-seven over a twenty-seven-year period, beginning in the year 2000; (4) the growing number of working women, who have different and, as yet, somewhat uncharted labor-force participation patterns; and (5) the growing economy (Crown 1985; Kingson et al. 1986).

Current Cohorts of Children and the Heterogeneity of the Elderly: Two Special Considerations of Intergenerational Transfers. In the United States, intergenerational resource transfers that are the products of public policy and private sector activity support individuals of all ages. Of growing importance, however, is a consideration of the effect of the nature of such transfers on two groups, current cohorts of children and the elderly, at any time when they are viewed as a heterogeneous group. Regarding the former, it is clear that, at present, many children live in poverty or near poverty and, thus, are not receiving from older generations (either older family members or older generations on the societal level) the resources they need to live satisfactory lives as children. Moreover, limited access during childhood to such resources as health care and education, in particular, leads to reduced economic opportunities and productivity in adulthood. Thus, without the infusion of such resources, children are unable to prepare themselves for a productive adulthood in which they are capable of successfully joining the active working population to sustain themselves. Moreover, they will also be unable to provide support for those individuals, young and old, who will then compose a large part of the dependent population of the future. For instance, persons age seventeen and under in 1990 will be twenty to thirty-seven years of age in 2010, when the first wave of the baby boom cohort will begin to retire, and forty to fifty-seven years of age in the year 2030, when the full weight of the baby boom retirement will be felt.

Regarding the heterogeneity of the elderly, it is important to keep in mind that older people in Western societies vary greatly not only in chronological age (forty marks the onset of protection under the U.S. Age Discrimination in Employment Act; eighty-five is generally considered the beginning age of the "oldest-old") but also in income, health, and activity status. In addition, the elderly vary, on these and other factors, according to race and gender. As a result, in old age chronological age alone is not an adequate indicator of the need for a substantial infusion of public or private sector resources. Indeed, some older people are still greater producers than consumers of society's resources. Likewise, for any particular individual, certain times during old age require a greater amount of societal resources than other times.

Outcomes of Creativity. The fruits of research, music, literature, systems of jurisprudence, and other cultural and scientific products represent very important types of societal-level intergenerational transfers. As long-term transfers that cross the generations of a society and frequently move from one society to another, these are resources that traverse both time and geography. (For instance, disease-resistant hybrid strains of rice developed in the United States and used in agricultural settings around the world benefited not only Americans alive during and after the mid-1950s but also people in other societies over succeeding decades.) Frequently, especially regarding the products of scientific research, those in the same birth cohort as the originator(s) or creator(s) do not feel the full impact, positive or negative, of the outcome themselves; this becomes part of the birthright, for better or worse, of the generations that follow. For example, those in the generation of the developers of the diphtheria/pertussis/tetanus vaccine, given routinely to infants, faced the risk of these diseases themselves during childhood. On the other hand, individuals in the same birth cohort as the developers of the atomic bomb have not lived the entire span of their lives, including childhood, coping with the implications of this scientific outcome.


In the mid-1980s, the equity of intergenerational transfers was a prominent topic of discussion in both the press and various academic settings. This topic is receiving renewed interest. Consideration usually centers on the allocation process for resources resulting from public policy. However, it is important to keep in mind that much of the time these resources affect individuals within the context of the family. While there are many perspectives regarding the justification and procedure for transferring resources across generations, four particular factors appear to underlie each of these perspectives, each one subject itself to multiple meanings. When there is disagreement about the procedure for and direction of resource distribution across generations, it is frequently due to disagreement regarding the meaning of one or more of these factors (Hirshorn 1991). These are (1) the concept of the generation, discussed previously; (2) the issue of whether the resource transfer results in one party's experiencing an absolute or relative gain or loss in comparison with others; (3) the perception of the resource "pie" to be allocated (e.g., Is it constant in size? expandable?); and (4) the idea of distributive justice, or fairness in the rationale for deciding how to allocate resources (e.g., transfers can be based on level of need, on merit, or on equal shares for all, among other criteria).

Intergenerational Inequity Perspective. One of the most discussed perspectives in recent years argues that there is intergenerational inequity in the transfer of resources in the United States, particularly resources resulting from public policy. It focuses on the relative welfare of current cohorts of youth and current cohorts of the elderly. This perspective maintains, moreover, that, in the United States in recent decades, the welfare of the young, especially those under the age of eighteen, has diminished as a result of the enhanced status of the elderly, who have been accumulating sizable proportions of the nation's personal wealth and, at the same time, been on the receiving end of the bulk of the resources stemming from social policy (Medicare and Social Security retirement funds are singled out especially). Moreover, those adhering to this view maintain, the absolute size of public expenditures directed at the elderly is a major cause of the current budget deficits and other economic problems facing the United States. The assumption is that sufficient funds will not exist in the future to ensure that those who are currently children and young adults will receive their fair share of these very resources—Social Security retirement and public sector health care support—in their own old age (Cornman and Kingson 1996). Among the problems with this perspective is that it assumes that the elderly, as a group, are all doing well in absolute terms; thus it does not take into consideration the variation within the older population that makes this group, which is quite heterogeneous regarding health status, economic status, living arrangements, and other factors. Moreover, this perspective relies on the idea that the correct concept for use in assessing the equity of public resources transferred across generations—one that would result in social justice—is numerical equality. Yet equal expenditures do not result in equal levels of return, no matter who receives the transfer. Finally, given the wide range of types of resources transferred within the context of the family and in the public and private sectors, it is meaningless even to try to arrive at an accurate measure of which generation/birth cohort/age group is faring better as a whole (Kingston et al. 1986).

Common Stake Perspective. An alternative view of intergenerational resource transfers notes the common stake that all generations/birth cohorts/age groups have in the wide variety of intergenerational exchanges. This perspective emphasizes the importance of using the concept of the life course in assessing the giving and receiving of resources at all levels and in all contexts, societal and familial. Thus, it emphasizes that, at some points along the life course, one generally takes more of certain kinds of resources than one gives, while at other points along the life course the opposite is true (e.g., hands-on care is very strong in infancy and sometimes in old age; use of tax revenues for education is very prominent during childhood). Moreover, generally we do not give the same resources from the very same people, not within the context of the family or on the societal level. For instance, usually we do not provide the unstinting, continuous, and comprehensive care we received in infancy to our parents, but we do to our own children.

This perspective also stresses the fact that the same intergenerational resource transfer affects some individuals directly and others indirectly. For example, the public sector program Temporary Assistance to Needy Families, provides direct support to children in families headed by parents who are unable to provide sufficient work-related income; thus, family funds are freed to purchase such items as needed medical supplies for, say, an ailing grandparent. Indirectly affected by another public transfer that flows intergenerationally is the schoolchild, living with a grandparent, whose lunch money comes from the latter's monthly Social Security check. Finally, the common stake viewpoint underscores the need for current and future generations of the elderly to concern themselves with the welfare of children and young people and vice versa—for the sake of all concerned (Kingson et al. 1986).

(see also: Altruism; Filial Responsibility; Inheritance; Intergenerational Relations; Social Mobility)


Biegel, David, E., E. Sales, and R. Schultz 1991 FamilyCaregiving in Chronic Illness. Newbury Park, Calif.: Sage.

Cornman, James M., and E.R. Kingson 1996 "Trends, Issues, Perspectives, and Values for the Aging of the Baby Boom Cohort." The Gerontologist 36:15–26.

Covey, H. 1981 "A Reconceptualization of Continuity Theory." Gerontologist 21:628–633.

Cox, D., and G. Jakubson 1995 "The Connection Between Public Transfers and Private Interfamily Transfers." Journal of Public Economics 57:129–167.

Cox, D., and M.R. Rank 1992 "Inter-Vivos Transfers and Intergenerational Exchange." Review of Economicsand Statistics 74:305–314.

Crown, William H. 1985 "Some Thoughts on Reformulating the Dependency Ratio." Gerontologist 25:166–171.

Dowd, James J. 1975 "Aging as Exchange: A Preface to Theory." Journal of Gerontology 30:584–594.

Harris, Louis, and Associates, Inc. 1975 "The Myth and Reality of Aging in America." Washington, D.C.: National Council on the Aging, Inc.

Hill, Reuben 1965 "Decision Making and the Family Life Cycle." In E. Shanas and G. Streib, eds., SocialSructure and the Family, Englewood Cliffs, N.J.: Prentice Hall.

——1970 Family Development in Three Generations. Cambridge, Mass.: Schenkman.

Hirshorn, Barbara 1991 "Multiple Views of the Intergenerational Flow of Society's Resources." Marriageand Family Review, special edition on intergenerational relations.

Horowitz, Amy, and L. Shindelman 1983 "Reciprocity and Affection: Past Influences on Current Caregiving." Journal of Gerontological Social Work 5(3):5–20.

Kalish, Richard 1975 Late Adulthood. Monterey, Calif.: Brooks/Cole.

Kane, Rosalie A. 1996 "From Generation to Generation: Thoughts on Legacy." Generations, 20:5–9.

Kingson, Eric R., B.A. Hirshorn, and J.M. Cornman 1986 Ties That Bind: The Interdependence of Generations (report from the Gerontological Society of America). Washington, D.C.: Seven Locks Press.

Lillard, L.A., and R.J. Willis 1997 "Motives for Intergenerational Transfers: Evidence from Malaysia." Demography 34:115–134.

McGarry, K., and R.F. Schoem 1997 "Transfer Behavior Within the Family: Results from the Asset and Health Dynamics Study." Journals of Gerontology Series B—Psychological Sciences and Social Sciences 52:82–92, Special Issue.

Morgan, James N. 1983 "The Redistribution of Income by Families and Institutions and Emergency Help Patterns." In G.J. Duncan and J.N. Morgan, eds., FiveThousand American Families: Patterns of Economic Progress. (Institute of Social Research 16). Ann Arbor: University of Michigan Press.

Riley, Matilda W., and A. Foner 1971 "Social Gerontology and the Age Stratification of Society, Part 1." Gerontologist 11:79–87.

Rosenfeld, J.P. 1979 The Legacy of Aging: Inheritance andDisinheritance in Social Perspective. Norwood, N.J.: Ablex.

Schoeni, R.F. 1997 "Private Interhoushold Transfers of Money and Time: New Empirical Evidence:" Reviewof Income and Wealth 4:423–448.

Schorr, Alvin 1980 ". . . Thy Father and Thy Mother . . . A Second Look at Filial Responsibility and Family Policy." Washington, D.C.: Social Security Administration.

Stone, Robyn, Gail L. Cafferata, and Judith Sangl 1987 "Caregivers of the Frail Elderly: A National Profile." The Gerontologist 27:616–626.

Stull, Donald E. 1995 "Caregivers (Family)." In A.R. Davis, J. Boondas, and A. Lenihan, eds., Encyclopediaof Home Care for the Elderly.

Sussman, Marvin, J. Cates, and D. Smith 1970 The Familyand Inheritance. New York: Russell Sage Foundation.

U.S. Bureau of the Census 1996 "Population Projections of the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050." Current PopulationReports, Series P-25, No. 1130. Washington, D.C.: U.S. Government Printing Office.

Donald E. Stull
Barbrik Hirshorn