PARENTAL AND PUBLIC TRANSFERS TO YOUNG-WOMEN AND THEIR CHILDREN

This paper presents estimates of how an increase in welfare benefits f or the welfare-eligible affects the provision of parental support in t he form of both financial transfers and shared residence based on an o verlapping-generations framework incorporating game-theoretic interact ions among parents, their adult children, and the government. The empi rical results, obtained from two longitudinal data sets, indicate that the parents view a dollar of income earned by their daughters as equi valent to a dollar increase in welfare benefits. However, there exists only a small trade-off between the generosity of government aid and t he incidence of parental aid.