Abstract
This paper analyses the determinants of financial and time transfers from adult children to their older parents using the Survey of Health, Ageing and Retirement in Europe (SHARE). It is the first survey containing rich comparable interdisciplinary information about individuals aged 50+ from ten European countries (Austria, Denmark, France, Germany, Greece, Italy, the Netherlands, Spain, Sweden and Switzerland). The first part of the paper highlights the differences in the provision of upward private intergenerational transfers (in terms of both time and money) across the ten European countries. The second part describes the different determinants in the decision to provide time or money transfers to parents and evaluates whether these two types of assistance are substitutes or complements. Results highlight the existence of a substitution between time and money in relation to geographical distance and the existence of a weak substitution regarding the employment status of the middle-aged children.
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Notes
Part-time workers are defined as those usually working fewer than 30 h per week.
The health self-status variable is 1 if the respondent declare having a bad or a very bad health and zero otherwise.
The education variable is harmonized across countries by using the International Standard Classification of Education – 1997 version from UNESCO.
When the father and the mother are still alive, the variable “age” takes the value of the oldest parent and the variable “health status” is a dummy variable that is equal to 1, if at least one parent has a bad or very bad health status.
This information is not directly observable in SHARE data. To compute this variable, we assume that the parents still live together if both are alive and if the geographical distance between the respondent and his father, it is the same as for the mother.
The exclusion criteria adopted in this analysis are: The age of the oldest parent must not exceed 110 years and the parents have to be at least 14 years older than their children.All observations included in the first and last percentile of the income distribution are discarded from the analysis.
We do not show the amount of financial transfer because of the small sample size.
Throughout this paper, we will refer to three main groups of countries: Northern countries: Sweden, Denmark and Netherlands; Western countries: Germany, France, Austria and Switzerland; Mediterranean countries: Italy, Spain and Greece.
To construct this figure, we add to our selected sample the adult children living in the same household as their parents. We then assume that cohabiting children are those that live in the same household or the same building as their parents.
We do not use a tobit model because the tobit assumes that the impact of the explanatory variables on the decision to make a transfer and its intensity has the same sign. However, descriptive statistics on time and financial transfers by country show that this is not necessarily the case.
The number of adult children providing financial assistance to their parents is only 125 for the ten European countries.
We estimated the model with women only and found roughly the same results.
These coefficients are underestimated if children’s income is positively correlated to parental income and where the probability of financial transfer to the parents is negatively correlated to parental income.
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Acknowledgments
The SHARE data collection has been primarily funded by the European Commission through the 5th framework programme (project QLK6-CT-2001-00360 in the thematic programme Quality of Life). Additional funding came from the US National Institute on Aging (U01 AG09740-13S2, P01 AG005842, P01 AG08291, P30 AG12815, Y1-AG-4553-01 and OGHA 04-064). Data collection in Austria (through the Austrian Science Foundation, FWF), Belgium (through the Belgian Science Policy Administration) and Switzerland (through BBW/OFES/UFES) was nationally funded. The SHARE data set is introduced in Börsch-Supan et al. (2005); methodological details are contained in Börsch-Supan and Jürges (2005). The author acknowledges Izabela Jelovac, Pierre Thomas Leger, Sergio Perelman and Pierre Pestieau for their useful comments and suggestions.
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This paper uses data from early release 1 of SHARE 2004. This release is preliminary and may contain errors that will be corrected in later releases.
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Bonsang, E. How do middle-aged children allocate time and money transfers to their older parents in Europe?. Empirica 34, 171–188 (2007). https://doi.org/10.1007/s10663-007-9034-3
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DOI: https://doi.org/10.1007/s10663-007-9034-3