Happiness and altruism within the extended family

We propose a direct measure of altruism between parents and adult children, using survey data on happiness from the German Socio-Economic Panel for the years 2000–2004. The question of altruism within families has policy relevance, for example, to understand whether public transfers crowd out private ones. Previous empirical evidence, based on observed transfer behavior, has failed to establish a clear consensus. Using various cross section, panel data, and instrumental variable estimators, we find a robust association between the happiness of parents and that of their adult children. A 1 standard deviation increase in a child’s happiness is associated with the same increase in own happiness as that of a 20–45% increase in household income, depending on specification. DOI: https://doi.org/10.1007/s00148-010-0326-8 Posted at the Zurich Open Repository and Archive, University of Zurich ZORA URL: https://doi.org/10.5167/uzh-50625 Accepted Version Originally published at: Schwarze, Johannes; Winkelmann, Rainer (2011). Happiness and altruism within the extended family. Journal of Population Economics, 24(3):1033-1051. DOI: https://doi.org/10.1007/s00148-010-0326-8 Happiness and altruism within the extended family∗ Johannes Schwarze University of Bamberg and IZA Rainer Winkelmann University of Zurich and IZA