Old Age Security and Inter-Generational Transfer of Family Farms

This paper offers an economic analysis of the intra-family insurance aspect of farm transfer. Sharing of farm income by retired parents with their succeeding children may act like a pension fund. A theoretical model is adopted and a bargaining game suggested to formulate this inter-generational contract. The model is illustrated with data for family farms in a co-operative village in Israel, and the effect of farm-specific parameters (size, risk aversion, sale value of the farm) on the inter-generational distribution of farm wealth is demonstrated. Copyright 1999 by Oxford University Press.