Essays on Intergenerational Transfers and Living Arrangements
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Intergenerational relationships are playing an increasingly important role in today's family life. In this study, I utilize the data from the Health and Retirement Study (HRS) to explore the linkage between children's residences and their relationships with their parents. I first show that children in closer proximity to their parents are more likely to receive financial transfers from parents, and the differences of the proximity's effect suggest that parents’ financial transfers are at least in part to compensate for children's future care provisions. I then present a theoretical framework to analyze adult children's residential decisions in relation to the distance of parents’ residences. The model highlights the tradeoff for the children of being closer to the parents for the lower cost of providing care and having easier access to assist parents versus being closer to his or her desired location of residence that provides better amenities or services. The empirical analysis supports the prediction from the theoretical model: children with lower income, who are less educated, or are not working full-time, tend to live closer to the parents, whether comparing children across families or within a family. The results also demonstrate that living arrangements are closely linked to family caregiving arrangements as gender, sibship size, and sibling's residence all play a role in a child's residential decision. Lastly, I examine the Great Recession's impacts on living arrangements and care access for elderly parents and find that for average families, little has changed in terms of their proximity to their children or the gender disparity of care assignment. However, families whose mother was living under the poverty line saw increases in the number of children living in close proximity. Further analysis shows that the changes in living arrangements during the recession are strongly associated with the changes of children's financial situations, but its relationship with parent's conditions are mixed. By presenting the theoretical framework and empirical results about family living and caregiving arrangements, this study helps bridge the gap between the two lines of literature and provides a more integrated view of the intergenerational relationships for the elderly parents.
- Economics