Volume 33 - Article 41 | Pages 1153–1164  

Income sources and intergenerational transfers in different regimes: The case of East Germany's transformation

By Tobias Vogt, Fanny Annemarie Kluge

Abstract

Background: Intergenerational transfers are a fundamental feature of the economic life cycle. In western welfare states, private transfers typically flow from members of the older generations to their children and grandchildren, especially when in need, while public transfers tend to flow in the opposite direction.

Objective: This paper shows the changes in the relative importance of various income sources, such as labor income and public and private transfers, among eastern Germans of different age groups from 1988 to 2008. This period of rapid societal transition represents a quasinatural experiment setting that allows us to study how different political regimes shape the patterns of income and transfers among different age groups.

Methods: To study the income and transfer patterns among different age groups, we use the National Transfer Accounts method and rarely used data sources, such as the income survey of blue-collar and white-collar worker households conducted in 1988 in the German Democratic Republic (GDR).

Results: We find that there was a shift in income and transfer patterns immediately after the fall of the Berlin Wall. We show that the elderly gained the most from reunification, and transferred an increasing fraction of their income to their children and grandchildren.

Author's Affiliation

• Tobias Vogt - Rijksuniversiteit Groningen, the Netherlands EMAIL
• Fanny Annemarie Kluge - Max-Planck-Institut für Demografische Forschung, Germany EMAIL

Other articles by the same author/authors in Demographic Research

Demography and the statistics of lifetime economic transfers under individual stochasticity
Volume 32 - Article 19

Most recent similar articles in Demographic Research

The welfare state and demographic dividends
Volume 36 - Article 48    | Keywords: aging, demographic dividend, intergenerational transfers, national transfer accounts (NTA), overlapping generations models, Spain, Sweden, United States of America, welfare state

Household production and consumption over the life cycle: National Time Transfer Accounts in 14 European countries
Volume 36 - Article 32    | Keywords: childcare, cross-national research, gender, housework, intergenerational transfers, national transfer accounts (NTA), time use

Intergenerational money and time transfers by gender in Spain: Who are the actual dependents?
Volume 34 - Article 24    | Keywords: gender relationships, hypogamy, intergenerational transfers, national transfer accounts (NTA), Spain, time transfers, time use

Does grandparental help mediate the relationship between kin presence and fertility?
Volume 34 - Article 17    | Keywords: fertility, grandparenting, Indonesia, intergenerational transfers, kin networks

Measuring intergenerational financial support: Analysis of two cross-national surveys
Volume 33 - Article 33    | Keywords: Generations and Gender Programme (GGP), intergenerational transfers, Survey of Health, Ageing and Retirement in Europe (SHARE)