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Who Coresides With Parents? An Analysis Based on Sibling Comparative Advantage

Abstract

Coresidence between elderly parents and their married adult children is common in East Asian societies. We analyze theoretically and empirically with which adult child parents coreside when the extended family has multiple adult children, and we show that this decision-making process can be rationalized. Specifically, we find evidence that suggests division of labor among family members through the choice of coresidence. Theoretically, we show that when parents can help children with housework, they will coreside with higher-educated children whose opportunity cost of housework is higher. On the other hand, when parents need help from children in housework labor, they will coreside with lower-educated children, whose opportunity cost of housework is lower. By adopting a data set containing information on parents and their married adult children, we find that our two hypotheses are supported among families from rural China. The probability of coresidence is positively associated with relative education of the children when parents can provide help but negatively associated with education when parents need help.

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Fig. 1

Notes

  1. 1.

    The opportunity cost of housework labor refers to the benefits that people have to give up when they choose to do housework.

  2. 2.

    The social origin of the extended family (rural or urban) is defined by the major residence of the respondent child at the age of 16.

  3. 3.

    This conclusion relies on the assumption of income pooling. In other words, the marginal benefit from money does not differ across siblings.

  4. 4.

    Pareto efficiency indicates resource allocation such that it is impossible to increase the welfare of some family members without hurting the welfare of other family members.

  5. 5.

    For the majority of respondents, information was collected on no more than five siblings. However, if the birth order of the sibling that is coresident with the parents is larger than six, his or her information will be collected by a set of separate questions in the survey. If parents coreside with multiple children, the dummy dependent variable “coresidence with parents” will be coded as 1 for all coresident children.

  6. 6.

    Some studies have noted that elderly parents may still engage in work after retirement, especially in rural China (Giles et al. 2011; Pang et al. 2004). Therefore, as a robustness check, we try to alter the age cutoffs for parents to restrict the sample; our results are not sensitive to the age of parents that we use to restrict our sample.

  7. 7.

    The percentage of only-child families is very low in the original sample (7 %) because most Chinese adults in a 2004 survey actually belong to pre-one-child-policy generations.

  8. 8.

    Because divorce is extremely rare in the sample (only 2.37 % respondents in the original data report that their marital status is divorced), “unmarried children” mainly refers to children before their first marriage.

  9. 9.

    The procedure of restricting the sample is unlikely to cause a significant sample selection problem for our main empirical model because selecting into the sample is mainly determined by extended family-level characteristics. However, our major variation comes from within-family difference.

  10. 10.

    One may concern that the magnitude of the interaction effect in nonlinear models can be potentially vulnerable to asymptotic bias (Ai and Norton 2003). Thus, we plot the actual marginal effects (Fig. 1) when interpreting our results substantively. In addition, we also estimate linear family fixed-effects models (not shown). The results turn out to be very similar to fixed-effects logit models.

  11. 11.

    In cases in which two parents coreside with one child, we use the maximum health status and age of the two parents (the more unhealthy and the older) as the measurements.

  12. 12.

    In this study, the nine occupation dummy variables are constructed based on broad occupation categories specified in the survey. However, without including these dummy variables, our main findings remain unchanged.

  13. 13.

    For example, urban parents are more likely to have health insurance and pension after retirement.

  14. 14.

    By adopting this measure, we assume that the parents and all their children shared the same major residence when the respondent child was 16. Alternatively, family origin could also be measured by mother’s hukou status when the respondent child was 16, and this measure yields similar results.

  15. 15.

    Questions regarding purchase of housework service are asked only of respondent children. Therefore, the statistics in Table 2 are about all respondent children.

  16. 16.

    1 RMB = 0.12 USD in 2004.

  17. 17.

    The coefficient of the overall effect of education on coresidence in Model 3 is 0.618 + (–0.041 × PHealth) + (–0.007 × PAge). First, we hold PAge at sample mean 74. The coefficient is negative when PHealth is higher than 2.4. Then we hold PHealth at sample mean 2.7. The coefficient is negative when PAge is higher than 72.5.

  18. 18.

    The first subgroup includes individuals whose parents have already distributed all wealth to children or have no wealth to distribute to begin with. The second subgroup includes individuals whose parents have not yet distributed all their wealth.

  19. 19.

    Omitted variable bias is determined by ∝ × γ, where ∝ is the correlation between omitted variable and dependent variable, and γ is the correlation between omitted variable and independent variable. When ∝ × γ > 0, \( \widehat{\upbeta}>\upbeta \), we overestimate the true effect. When ∝ × γ < 0, \( \widehat{\upbeta}<\upbeta \), we underestimate the true effect.

  20. 20.

    Lei et al. (2011) estimated an extended-family fixed-effects model using CHARLS data. Leopold et al. (2014) used HRS data and a family fixed-effects model to study the relationship between distance to parents and caregiving in the United States.

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Acknowledgments

We thank Dalton Conley, Paula England, Robert Jackson, Willie Jasso, Erik H. Wang, Raymond Wong, Larry Wu, Yu Xie, and Yi Zhu for their helpful comments. An earlier version of this article was presented at the 2013 annual meeting of the Population Association of America, New Orleans, LA.

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Correspondence to Sen Ma.

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Ma, S., Wen, F. Who Coresides With Parents? An Analysis Based on Sibling Comparative Advantage. Demography 53, 623–647 (2016). https://doi.org/10.1007/s13524-016-0468-8

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Keywords

  • Coresidence
  • Elderly parents
  • Sibling comparative advantage