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Title: Intergenerational Support and the Life-Cycle Incomes of Parents and Children: Co-Residence and Interhousehold Financial Transfers
Resulting in 1 citation.
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Rosenzweig, Mark R. Wolpin, Kenneth I. |
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Intergenerational Support and the Life-Cycle Incomes of Parents and Children: Co-Residence and Interhousehold Financial Transfers Working Paper, University of Minnesota, Minneapolis, 1990 Cohort(s): Mature Women, Older Men, Young Men Publisher: University of Minnesota Keyword(s): Family Resources; Family Structure; Financial Assistance; Household Structure; Income; Intergenerational Patterns/Transmission; Life Cycle Research; Modeling, Fixed Effects; Pairs (also see Siblings); Residence; Sons; Transfers, Financial; Transfers, Parental; Transfers, Private; Transfers, Public Permission to reprint the abstract has not been received from the publisher. This paper examines the relationship between generations with particular attention to the two principal mechanisms by which parents provide resource to their young adult offspring--shared residence and financial transfers to offspring living apart. The analysis made use of parent-son pairs from the NLS of Young Men, Older Men, and Mature Women. These data indicate that: (1) intergenerational co-residence and interhousehold transfers are at least as important as governmental transfers in providing support for young adults, with 20 percent of adult men in their 20s receiving one or another form of parental support; (2) there are substantial differences by race in the type of intergenerational support with black men ages 18-31 appearing twice as likely as white men to reside with at least one parent and half as likely as white men to receive financial transfers when residing apart from their parents. Econometric analysis of the choices between shared residence and non-coresidence cum financial transfers were supportive of the theoretical framework linking these two transfer methods and strongly rejected aggregation of co-residence and interhousehold financial transfers as perfect substitutes. They also suggested that failure to control for unobserved permanent differences across households can lead to serious biases; in particular the obscuring of the important role of parental resources in determining the incidence of transfers. Fixed effects logit estimates indicated that for given parental incomes, young men are less likely to both co-reside with parents and to receive financial transfers while residing apart the higher are their current earnings. Moreover, young adults attending school are more likely to reside with parents but are less likely to receive aid while living elsewhere; in contrast, their unemployment induces both co-residence and financial transfers. Parental income, for given offspring earnings and activities, also matters. Parents with higher incomes are more likely to provide transfers to children via separate residence combined with remittances than they are to co-reside with children. Indeed, among black families in which the mother has less than eight years of schooling, increases in income (net of governmental transfers) reduce significantly the likelihood that parents reside with their adult sons. For mothers with schooling levels above eight years, however, the authors could explain all of the differences in the life-cycle patterns of intergenerational co-residence choices of black and white families based on the life-cycle differences in the earnings of both generations and the investment decisions and employment experiences of the younger generation. |
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Bibliography Citation
Rosenzweig, Mark R. and Kenneth I. Wolpin. "Intergenerational Support and the Life-Cycle Incomes of Parents and Children: Co-Residence and Interhousehold Financial Transfers." Working Paper, University of Minnesota, Minneapolis, 1990. |