ARE PRIVATE TRANSFERS ALTRUISTICALLY MOTIVATED? THE CASE OF THE REPUBLIC OF KOREA BEFORE AND DURING THE FINANCIAL CRISIS

Using household panel data from Korea for 1995–98, this paper shows that private transfers of Korean households were altruistically motivated. Although the altruistic motive of households seemed to be reinforced during the financial crisis, the amount of private transfers was still not sufficient to support households living in urban areas. Also, there had been a strong crowding‐out relation between private and public transfers. This suggests that the Korean government should have designed its public transfer scheme carefully in order to improve the effectiveness and efficiency of its social safety net programs.