Parent–child co-residence and bequest motives in China

Abstract

In this paper, I discuss the actual conditions and the determinants of co-residence between older parents and their children in China, especially the impact of bequest motives on parent-child co-residence, using micro data from the "Survey of Living Preferences and Satisfaction," conducted at Osaka University. More specifically, I use three subsamples of older respondents (those who live in urban areas, those who live in rural areas, and the pooled sample of both) to analyze the impact of bequest motives and other factors on the probability of parent-child co-residence. The results are as follows: Bequest motives are strong in China, with more than 60 percent of respondents having a bequest motive, and the parent-child co-residence rate is also high (just under 60 percent). Bequest motives do not have a significant impact on the probability of parent-child co-residence in any of the three samples. However, in urban areas of China, if older parents own their own homes, the probability that they co-reside with their children increases as the value of their home increases. In rural areas of China and in the country as a whole, the coefficient of parental income is positive and significant in some cases, meaning that children are more likely to live with their parents if parental income is higher. All of these results suggest that, in both urban and rural areas of China, the Chinese are selfishly motivated and the life-cycle model applies.

Saving and Bequest in China: An Analysis of Intergenerational Exchange

“…On the one hand, we note that a scarce provision of basic public services and a less developed social security system imply that most elderly Chinese rely on their children for care and support, see Banerjee et al (2010). This is consistent with a traditional self-reliance within Chinese families (see e.g., Yin (2010)). Indeed, while the typical co-residence between parents and their son's family gradually becomes outdated in modern China, family ties are still tight.…”

Allocating Family Responsibilities for Dependent Older People in Mexico and Peru

“…Quantitative analysis for United States populations found no evidence of this effect, although a recent Chinese study did (Perozek, 1998;Yin, 2010).…”

Strategic interaction between inter vivos gifts and housing acquisition

“…Instead of using realistic values of the child's income, we thus use residuals of the regression of the child's income on householder's age (proxy variable for tenure) and its squared value. Even considering these points, the empirical results are consistent with those in Table 4. 20 (Tomassini, Wolf, and Rosina, 2003;Angelini, 2007), the US (Bernheim, Shleifer, and Summers, 1985;Cox, 1987), and East Asian countries (Horioka, 2002;Yamada, 2006;Kureishi and Wakabayashi, 2009;Yin, 2010). However, there are usually cultural di¤erences in parents' (children's) attitudes toward children (parents) between countries.…”

“…The motive behind transfer decisions, however, is a controversial issue. Many studies in relation to intergenerational transfers or bequests have suggested parents are more likely to possess an exchange motive rather than an altruistic motive (Bernheim, Shleifer, and Summers, 1985;Cox, 1987;Horioka, 2002;Tomassini, Wolf, and Rosina, 2003;Yamada, 2006;Angelini, 2007;Kureishi and Wakabayashi, 2009;Yin, 2010). That is, parents tend to enter an agreement with their children whereby their adult children agree to provide a service in exchange for receiving gifts.…”

“…That is, parents tend to enter an agreement with their children whereby their adult children agree to provide a service in exchange for receiving gifts. Tomassini, Wolf, and Rosina (2003), Yamada (2006), and Yin (2010), for example, demonstrated that transfers are made when children choose to locate their home close to their parents'home, because one's adult children nearby may facilitate more regular contact with the children. 2 The remainder of this paper consists of three parts.…”