Chuang JCC. Do social allowance transfers crowd out private transfers? An analysis of responses among elderly households in Taiwan
Int J Soc Welfare 2011: ••: ••–••© 2011 The Author(s), International Journal of Social Welfare © 2011 Blackwell Publishing Ltd and the International Journal of Social Welfare.
This article examines whether public transfers ‘crowd out’ private inter-household transfers in Taiwan, focusing on two old age social allowance schemes (old age allowance and old age farmer allowance) during the 2002–2008 period. This study used a data set from the Survey of Family Income and Expenditure in Taiwan. Empirical evidence suggests that Taiwanese donors are strongly motivated by altruism, and that the increase of public transfers will crowd out private transfers, and vice versa. Besides, altruism is more likely to dominate among poorer elderly recipients, whereas the exchange motive would dominate among richer recipients. Thus, the response of Taiwanese donors is likely to neutralise the distributional impact of public transfers. Finally, the elderly are not a homogenous group, and the effect of public transfers on private transfers varies significantly by household characteristics, in particular depending on age, marital status and living arrangements.