Analysis of Private Transfers with Panel Fixed Effect Censored Model Estimator

• Main Authors: KANG, Sung Jin, LEE, Myoung-jae
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2003
• Subjects: Private transfers; Public transfers; Panel data; Econometrics
• Online Access: https://ink.library.smu.edu.sg/soe_research/173; https://ink.library.smu.edu.sg/context/soe_research/article/1172/viewcontent/AnalysisPrivateTransfers_2003.pdf
• Institution: Singapore Management University

Understanding private transfer is important for safety-net policies because private transfer provides economic benefits similar to those of public programs such as unemployment insurance and pension. Applying Honoré’s [Econometrica 60 (1992) 533] panel fixed-effect censored model estimator to Korean data, we show that private transfer is altruistically motivated and there is a strong crowding-out effect of public transfer on private transfer. We also find that low-income people suffered to different degrees during the financial crisis period of 1997 to 1998. This finding and the crowding-out effect may be taken as failures of the Korean public transfer programs during the period.