The role of European welfare states in intergenerational money transfers: a micro-level perspective

ABSTRACT This article uses a comprehensive theoretical framework to explain why parents send money to particular children, and examines whether intergenerational solidarity is shaped by spending on various welfare domains or provisions as a percentage of gross domestic product. The theoretical model at the level of parents and children distinguishes parental resources and children’s needs as the most likely factors influencing intergenerational money transfers. Differences in spending on various welfare domains is then used to hypothesize in which countries children with specific needs should be most likely to receive a transfer. For parents we hypothesize in which countries parents with specific resources available should be most likely to send a transfer. We use data from the first wave of the Survey of Health and Retirement in Europe (SHARE) to analyse the influence of welfare-state provisions on the likelihood of intergenerational transfers in ten European countries. The results indicate that, in line with our expectations, the likelihood of a transfer being made is the outcome of an intricate resolution of resources (ability) of the parents and the needs of a child. Rather large differences between countries in money transfers are found. Our results suggest however that insofar as previous work using distinct welfare state typologies considers money transfers, such a clear distinction between typologies is not justified.