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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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.
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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"The Strategic Bequest Motive,"
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Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986.
"The Strategic Bequest Motive,"
Journal of Labor Economics,
University of Chicago Press, vol. 4(3), pages S151-82, July.
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