Gifts as Binding Signals: Social Contacts and Gifts in Europe

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Abstract

We examine the ‘strategic gift’ hypothesis, where receiving a monetary gift prompts adult children to increase social contact with their parents. Using unique longitudinal data from the Survey of Health, Ageing and Retirement in Europe (SHARE), which tracks adult children and their aging parents across various European countries over more than a decade (2004–2015), we first document that while social norms promote equal division of visible bequests among children, gifts—being less visible and unevenly distributed—do not follow the same pattern. Leveraging exogenous variation from fiscal incentives caused by changes in inheritance tax legislation, we apply instrumental variable (IV) techniques and use a control function approach with endogenous treatment effect regression to assess the impact of receiving gifts on social contact. We show that financial transfers from parents significantly increase parent-child social interactions. We present heterogeneity analyses by the presence of children, lack of siblings, poor parental health and family type.

Biography

Berkay Özcan is a Professor of Social Research and Public Policy at New York University (Abu Dhabi) and has held faculty positions at the London School of Economics (LSE), where he has been a Professor of Social and Public Policy and Co-Director of the Women in Social and Public Policy Research Hub (WiSPPRH). Before joining LSE in 2011, he worked as a post-doctoral researcher at Yale University. Berkay held visiting positions at Princeton (2006), Essex (2007), Oxford (2015), and UCL (2017, 2023). Berkay received his PhD in Political and Social Sciences from Universitat Pompeu Fabra (Barcelona) after an MSc in Economics from the same university. Berkay’s research is interdisciplinary and has appeared in top journals like American Economic Review, Annual Review of Sociology, PNAS, Journal of Human Resources, and Demography, among many others. He’s featured in over 60 media outlets, including The New York Times, Daily Mail, El Pais and Huffington Post, and interviewed on BBC, CTV, iTV, and Irish Radio. Berkay is an elected board member of RC28 Social Stratification and serves on the editorial board of Research in Social Stratification and Mobility. He’s been an Advisory Board member of NYU Tulsa, and MiSOCat Essex University, a founding member of International Inequalities Institute (III), and affiliate of CASE at the LSE. He is an external Fellow of CReAM, UCL. He also consulted IOM of the UN, the European Investment Bank, Public Health England, and the UK Ministry of Justice.

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