Abstract
One-fifth of children aged below five with employed mothers benefit from grandparent provided child care as their main source of daycare in the US. Using data from the health and retirement study, we investigate how grandchild care needs relate to intergenerational transfers of time and money and grandparents’ labor supply behavior. We find that grandparents with a new born grandchild are more likely to provide grandchild care while married grandparents are also more likely to be employed and provide financial help. Grandparents with grandchildren living close by provided higher time transfers while married grandmothers with resident grandchildren also worked longer hours.
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Notes
Approximately one third of grandparent headed households have no parents in the household while two thirds have at least one young parent living in the household. The median age of US grandparent caregivers is 57. The majority, 68 % of grandparent caregivers are White while 29 % are African-American.
There are also concerns about potential negative associations between extensive grandchild care and grandparents’ health in the sociological and medical literature (Baker and Silverstein 2008; Fuller-Thomson and Minkler 2000; Hughes et al. 2007; Minkler and Fuller-Thomson 2001). Reinkowski (2013) finds a positive association between occasional grandchild care and health.
Other data sets such as the panel study of income Dynamics allow a researcher to match parents and adult children data. Detailed information on both generations is, however, available only when they live in different households as main respondents. Moreover, transfers recorded concern transfers to and from relatives in general thereby not allowing one to pinpoint how much was given to and from parents as opposed to siblings or aunts and uncles. Datasets such as the Survey of Income and Program Participation, on the other hand, contain information on the grandparent only when the latter lives with the adult children.
Maestas (2010) find that at least 26 % of retirees go back into paid employment.
We note that married grandparents could be providing some grandchild care at separate times so that the lower hours of grandchild care per married grandparent does not necessarily imply that their grandchildren were spending less time in grandparent care.
We focus our study on downward transfers from the grandparent generation to the younger generations. Less than 6 % of respondents received financial transfers from their adult children and only around 1.5 % both received financial transfers from adult children and provided grandchild care so that it does not seem that the majority of grandparents were being paid for providing child care. This is consistent with Jendrek (1993) who finds from case data based on 114 grandparents who provide daily care that 71 % were not paid for providing such care. Thus, it is not surprising that the more casual grandparents caregivers included in the HRS would also not be paid.
The only measure of distance in the HRS is whether adult children (the parents) live within 10 miles of the grandparents.
We do not observe census division of residence of the adult children. However, since it is unlikely that grandparents would be able to provide grandchild care to children who live too far away, using the census division of residence of the grandparents may be a good approximation.
When the grandparent is not working, we impute the wage as the last wage earned. Labor supply regressions based on only the sample of working grandparents yielded similar results as reported in this study.
We are grateful to an anonymous reviewer for pointing this out. Around 3 % of respondents in the HRS had their first grandchild during our sample period.
Similar regressions performed on the amount of financial assistance that married grandparents received from parents showed an increase of $12.6 per week significant at the 5 % level when the grandchild is resident in the grandparent household. This suggests that parents potentially gave higher monetary transfers to grandparents when living together. Approximately 5 % of married grandparents with a resident grandchild received positive financial transfers from parents suggesting that the effect was applicable to a very small proportion of co-resident families.
The effects on financial transfers need to be interpreted with a grain of salt. It is possible that the cost of formal child care is correlated with average prices in the census division of residence. While we have controlled for wages of the grandparents and included census division fixed effects in our regressions, it could still be that the higher financial transfers that grandparents are making are related to higher correlated costs such as education expenses.
This result is qualitatively consistent with the findings of Ying and Marcotte (2007) for three generation families.
Ying and Marcotte (2007) do not find evidence that the decision to take in a grandchild in the household is endogenous to grandparents’ labor supply.
We do not observe hours of grandchild care separately for each adult child but only which adult child benefited from grandchild care. On the other hand, financial transfers are observed separately for each adult child in the HRS.
In an attempt to analyze time allocations relationships with a first grandchild, we performed similar analysis as in our baseline models by also including respondents with children but without grandchildren in the sample. We distinguish between having a first grandchild as opposed to additional grandchildren by including a dummy variable taking value one if respondents had their first grandchild and zero otherwise, and another dummy variable taking value one if respondents had an additional grandchild and zero otherwise. We find that first time grandparents were between 2 and 27 % more likely to provide grandchild care and on average provided 0.4–1 additional hours of grandchild care. The effects were statistically significant for married grandparents. Similarly, grandparents with an additional grandchild were 8–14 % more likely to provide grandchild care and on average provided 0.27–1 h of additional grandchild care hours. The effects were statistically significant at the 5 % level for all grandparents. Single grandmothers with a first grandchild were more 5 % likely to be employed while single and married grandfathers with an additional grandchild were also more likely to be employed by 6 and 1.5 % respectively. We found no statistically significant impacts on labor hours. Full tables are available upon request.
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Acknowledgments
I would like to thank James Banks, Samuel Belinsky, Soshana Grossbard, Hilary Hoynes, Kathleen McGarry, Costas Meghir, Nicola Pavoni, Ian Preston, Ken Yamada, and two anonymous reviewers for insightful comments and suggestions. All mistakes remain my own.
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Ho, C. Grandchild care, intergenerational transfers, and grandparents’ labor supply. Rev Econ Household 13, 359–384 (2015). https://doi.org/10.1007/s11150-013-9221-x
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DOI: https://doi.org/10.1007/s11150-013-9221-x