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Do Coresidency with and Financial Transfers from Children Reduce the Need for Elderly Parents to Work in Developing Countries?

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Author Info
Deborah Cobb-Clark
Lisa A Cameron

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Abstract

What drives the labor supply decisions of the elderly in developing countries? To what extent do elderly parents use coresidence with or financial transfers from children to reduce their own labor supply in old age? These questions are increasingly important because populations in many developing countries are rapidly aging. A clear understanding of the relationships between different means of support in old age is crucial to the development of sensible policy responses. This paper is one of only a few studies that seeks to formally model elderly labor supply in the context of a developing country while taking into account coresidency with and financial transfers from children. We find little evidence that support from children – either through transfers or coresidency – substitutes for elderly parents’ need to work. Thus, as in developed countries, there is a role for public policy to enhance the welfare of the elderly population.

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Publisher Info
Paper provided by Centre for Economic Policy Research, Research School of Social Sciences, Australian National University in its series CEPR Discussion Papers with number 508.

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Length: 43 pages
Date of creation: Dec 2005
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Handle: RePEc:auu:dpaper:508

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Related research
Keywords: Intergenerational transfers; Old-age support; Elderly labor supply;

Find related papers by JEL classification:
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped

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References listed on IDEAS
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    Other versions:
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    Other versions:
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  4. Cox, Donald & Rank, Mark R, 1992. "Inter-vivos Transfers and Intergenerational Exchange," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 305-14, May. [Downloadable!] (restricted)
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  9. Ravallion, Martin & Dearden, Lorraine, 1988. "Social Security in a "Moral Economy": An Empirical Analysis for Java," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 36-44, February. [Downloadable!] (restricted)
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  15. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1997. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1121-66, December.
    Other versions:
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Cited by:
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  1. Schüler, Dana, 2007. "Incentive Effects of Transfers within the Extended Family: The Case of Indonesia," Proceedings of the German Development Economics Conference, Göttingen 2007 29, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
  2. Sarmistha Pal, 2007. "Effects of Intergenerational Transfers on Elderly Coresidence with Adult Children: Evidence from Rural India," IZA Discussion Papers 2847, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Chung Tran, 2008. "Transfers and Labor Market Behavior of the Elderly in Developing Countries: Theory and Evidence from Vietnam," Caepr Working Papers 2008-018, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington. [Downloadable!]
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