Of rotten kids and Rawlsian parents: The optimal timing of intergenerational transfers

This paper shows that altruistic parents with utilitarian preferences may f are better if they transfer resources to their children early in life inste ad of delaying the bulk of transfers until after their death. Moreover, the outcome of the analysed "family transfer game" is not Pareto-efficient in the case of bequests. However, if altruistic parents hold. Rawlsian prefere nces, they will be indifferent between gifts and bequests, and Pareto-effic iency is always obtained. In intermediate cases of Atkinson-type welfare fu nctions, welfare losses of bequests compared to gifts disappear as the aver sion to inequality converges to infinity. JEL classification: D61, D64, J22 .