Advertisement

European Journal of Ageing

, Volume 11, Issue 3, pp 249–259 | Cite as

The balance of intergenerational family transfers: a life-cycle perspective

  • Stipica Mudrazija
Original Investigation

Abstract

The aim of this study is to determine the likelihood and net amount of parent–child transfers over the adult life cycle across European welfare regimes. The study introduces an economic life-cycle model of family transfers to describe the evolution of family exchanges across generations over time, which reveals a nonlinear relationship of age and net family transfers. Furthermore, it refines the method of estimating parent–child net transfers. Data come from the Survey of Health, Ageing, and Retirement in Europe, and include 36,095 parent–child dyads from 11 European countries representing social democratic, conservative, and traditional welfare-state regimes. The findings reveal net value of family intergenerational support follows a nonlinear pattern across the adult life cycle, with positive transfers from parents to adult children decreasing modestly until advanced old age when the decrease intensifies. Net family support benefits individuals and generations with larger relative need. The transition in the net family support pattern starts later and is less pronounced across social democratic welfare-regime countries while the opposite is true in traditional welfare-regime countries. These findings might be interpreted as being linked to differences in the public policies guaranteeing different levels of provision for dependent populations across different welfare regimes. They are consistent with a comparatively smaller role of family support in the intergenerational redistribution of resources in societies with larger public intergenerational support to dependent populations.

Keywords

Intergenerational transfers Life cycle Welfare regimes SHARE 

Notes

Acknowledgments

The author is grateful to the Editor, two anonymous reviewers, Dr. Jacqueline Angel and Dr. Donald Cox, for their helpful comments and suggestions on earlier versions of this manuscript. This paper uses data from SHARE wave 2 release 2.5.0, as of May 24th 2011. 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 program Quality of Life), through the 6th Framework Programme (projects SHARE-I3, RII-CT-2006-062193, COMPARE, CIT5-CT-2005-028857, and SHARELIFE, CIT4-CT-2006-028812) and through the 7th Framework Programme (SHARE-PREP, N° 211909, SHARE-LEAP, N° 227822 and SHARE M4, N° 261982). Additional funding from the U.S. National Institute on Aging (U01 AG09740-13S2, P01 AG005842, P01 AG08291, P30 AG12815, R21 AG025169, Y1-AG-4553-01, IAG BSR06-11 and OGHA 04-064) and the German Ministry of Education and Research as well as from various national sources is gratefully acknowledged (see http://www.share-project.org for a full list of funding institutions).

References

  1. Ahlberg JH, Nilson EN, Walsh JL (1967) The theory of splines and their applications. Academic Press, New YorkGoogle Scholar
  2. Albertini M, Kohli M (2012) The generational contract in the family: an analysis of transfer regimes in Europe. Eur Sociol Rev. doi: 10.1093/esr/jcs061
  3. Albertini M, Kohli M, Vogel C (2007) Intergenerational transfers of time and money in European families: common patterns—different regimes? J Eur Soc Policy 17(4):319–334CrossRefGoogle Scholar
  4. Attias-Donfut C (ed) (1995) Les solidarités entre générations: vieillesse, familles, État. Nathan, ParisGoogle Scholar
  5. Attias-Donfut C, Ogg J (2009) Évolution des transferts intergénérationnels: Vers un modèle européen? Retraite Soc 58:11–29Google Scholar
  6. Attias-Donfut C, Ogg J, Wolff F-C (2005) European patterns of intergenerational financial and time transfers. Eur J Ageing 2:161–173CrossRefGoogle Scholar
  7. Barro RJ (1974) Are government bonds net wealth? J Polit Econ 82(6):1095–1117CrossRefGoogle Scholar
  8. Becker GS (1974) A theory of social interactions. J Polit Econ 82(6):1063–1093CrossRefGoogle Scholar
  9. Berry B (2008) Financial transfers from living parents to adult children: who is helped and why? Am J Econ Sociol 67(2):207–238CrossRefGoogle Scholar
  10. Bonsang E (2007) How do middle-aged children allocate time and money transfers to their older parents in Europe? Empirica 34:171–188CrossRefGoogle Scholar
  11. Brandt M, Deindl C (2013) Intergenerational transfers to adult children in Europe: do social policies matter? J Marriage Fam 75:235–251CrossRefGoogle Scholar
  12. Brandt M, Haberkern K, Szydlik M (2009) Intergenerational help and care in Europe. Eur Sociol Rev 25(5):585–601CrossRefGoogle Scholar
  13. Brown JR, Weisbenner SJ (2002) Is a bird in hand worth more than a bird in the bush? Intergenerational transfers and savings behavior (NBER working paper no. 8753). National Bureau of Economic Research, CambridgeGoogle Scholar
  14. Burbidge JB, Magee L, Robb AL (1988) Alternative transformations to handle extreme values of the dependent variable. J Am Stat Assoc 83(401):123–127CrossRefGoogle Scholar
  15. Castles FG (1993) Introduction. In: Castles F (ed) Families of nations: patterns of public policy in western democracies. Aldershot, Dartmouth, pp xiii–xxiiiGoogle Scholar
  16. Chien S et al (2013) RAND HRS data documentation, version M. http://hrsonline.isr.umich.edu/modules/meta/rand/randhrsm/randhrsM.pdf. Accessed 7 Oct 2013
  17. Cooney TM, Uhlenberg P (1992) Support from parents over the life course: the adult child’s perspective. Soc Forces 71(1):63–84CrossRefGoogle Scholar
  18. Cox D, Eser Z, Jimenez E (1998) Motives for private transfers over the life cycle: an analytical framework and evidence for Peru. J Dev Econ 55:57–80CrossRefGoogle Scholar
  19. De Boor C (2001) A practical guide to splines. Springer, New YorkGoogle Scholar
  20. Deindl C, Brandt M (2011) Financial support and practical help between older parents and their middle-aged children in Europe. Ageing Soc 31:645–662CrossRefGoogle Scholar
  21. Dykstra PA, Fokkema T (2011) Relationships between parents and their adult children: a West European typology of late-life families. Ageing Soc 31:545–569CrossRefGoogle Scholar
  22. Eggebeen D, Hogan DP (1990) Giving between generations in American families. Hum Nat 1(3):211–232CrossRefGoogle Scholar
  23. Esping-Andersen G (1990) The three worlds of welfare capitalism. Princeton University Press, PrincetonGoogle Scholar
  24. Friedman M (1957) A theory of the consumption function. Princeton University Press, PrincetonGoogle Scholar
  25. Georgarakos D, Pasini G (2011) Trust, sociability, and stock market participation. Rev Financ 15:693–725CrossRefGoogle Scholar
  26. Haberkern K, Szydlik M (2010) State care provision, societal opinion and children’s care of older parents in 11 European countries. Ageing Soc 30:299–323CrossRefGoogle Scholar
  27. Hansen BE (2000) Sample splitting and threshold estimation. Econometrica 68(3):575–603CrossRefGoogle Scholar
  28. Heijdra BJ, Romp WE (2008) A life-cycle overlapping-generations model of the small open economy. Oxf Econ Pap 60:88–121CrossRefGoogle Scholar
  29. Hurd M, Smith JP, Zissimopoulos J (2007) Inter-vivos giving over the lifecycle (working paper no. 524). RAND Corporation Publications Department, Santa MonicaGoogle Scholar
  30. Igel C, Szydlik M (2011) Grandchild care and welfare state arrangements in Europe. J Eur Soc Policy 21(3):210–224CrossRefGoogle Scholar
  31. Kapteyn A, Panis C (2003) The size and composition of wealth holdings in the United States, Italy, and the Netherlands (NBER working paper no. 10182). National Bureau of Economic Research, CambridgeGoogle Scholar
  32. Kohli M, Albertini M (2007) The generational contract in the family: explaining regime differences in financial transfers from parents to children in Europe (DemoSoc working paper no. 2007-24). Universitat Pompeu Fabra, BarcelonaGoogle Scholar
  33. Kohli M, Künemund H (2003) Intergenerational transfers in the family: what motivates giving? In: Bengtson VL, Lowenstein A (eds) Global aging and challenges to families. Aldine de Gruyter, New York, pp 123–142Google Scholar
  34. Kohli M, Künemund H, Motel-Klingebiel A, Szydlik M (2005) Generationenbeziehungen. In: Kohli M, Künemund H (eds) Die zweite Lebenshälfte. Gesellschaftliche Lage und Partizipation im Spiegel des Alters-Survey, 2nd edn. VS Verlag für Sozialwissenschaften, Wiesbaden, pp 176–211Google Scholar
  35. Kotlikoff LJ (1989) Intergenerational transfers and savings (NBER working paper no. 2237). National Bureau of Economic Research, CambridgeGoogle Scholar
  36. Lee RD, Mason A (2011) Generational economics in a changing world. Popul Dev Rev 37(suppl):115–142CrossRefGoogle Scholar
  37. Leopold T, Raab M (2011) Short-term reciprocity in late parent–child relationships. J Marriage Fam 73:105–119CrossRefGoogle Scholar
  38. Litwin H, Vogel C, Künemund H, Kohli M (2008) The balance of intergenerational exchange: correlates of net transfers in Germany and Israel. Eur J Ageing 5:91–102CrossRefGoogle Scholar
  39. Mason A, Lee RD, Tung A-C, Lai M-S, Miller T (2006) Population aging and intergenerational transfers: introducing age into national accounts (NBER working paper no. 12770). National Bureau of Economic Research, CambridgeGoogle Scholar
  40. McGarry K, Schoeni RF (1995) Transfer behavior in the Health and Retirement Study: measurement and the redistribution of resources within the family. J Hum Resour 30(suppl):184–226CrossRefGoogle Scholar
  41. Modigliani F (1988) The role of intergenerational transfers and life cycle saving in the accumulation of wealth. J Econ Perspect 2(2):15–40CrossRefGoogle Scholar
  42. Modigliani F, Brumberg R (1954) Utility analysis and the consumption function: an interpretation of cross-section data. In: Kurihara K (ed) Post-Keynesian economics. Rutgers University Press, New Brunswick, pp 388–436Google Scholar
  43. Pence KM (2006) The role of wealth transformations: an application to estimating the effect of tax incentives on saving. Contrib Econ Anal Policy 5(1). doi: 10.2202/1538-0645.1430
  44. Rosenzweig MR, Wolpin KI (1993) Intergenerational support and the life-cycle incomes of young men and their parents: human capital investments, coresidence, and intergenerational financial transfers. J Labor Econ 11(1):84–112CrossRefGoogle Scholar
  45. SHARE (2006) Wave 2. http://cdata28.uvt.nl/sharedatadissemination/users/login. Accessed 15 August 2012
  46. Silverstein M, Conroy SJ, Wang HT, Giarrusso R, Bengtson VL (2002) Reciprocity in parent–child relations over the adult life course. J Gerontol Soc Sci 57(1):S3–S13CrossRefGoogle Scholar
  47. U.S. Census Bureau (2013) International database. http://www.census.gov/population/international/data/idb/informationGateway.php. Accessed 2 March 2013
  48. Zissimopoulos J, Smith JP (2009) Unequal giving: monetary gifts to children across countries and over time (working paper no. 723). RAND Corporation Publications Department, Santa MonicaGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Edward R. Roybal Institute on Aging, School of Social WorkUniversity of Southern CaliforniaLos AngelesUSA

Personalised recommendations