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Old-Age Support in Developing Countries: Labor Supply, Intergenerational Transfers and Living Arrangements

Author

Listed:
  • Cameron, Lisa A.

    (University of Melbourne)

  • Cobb-Clark, Deborah A.

    (University of Sydney)

Abstract

Without broad-based public pension schemes, the majority of the elderly in developing countries are left to rely on their own current and accumulated earnings and support from children as means of old-age support. We develop a cooperative bargaining model that allows us to jointly estimate the determinants of coresidency, financial transfers from non-coresiding children, and the labor-supply of elderly Indonesians. We find that many Indonesians, especially men, continue to work well into old age even if they are living with their adult children. There is little evidence that transfers are a substitute for the income support provided by the elderly parent’s own labor supply. Transfers are associated with a decline in hours of work only for non-coresiding mothers. Furthermore, transfers are not strongly related to parental need or the ability of the child to give.

Suggested Citation

  • Cameron, Lisa A. & Cobb-Clark, Deborah A., 2001. "Old-Age Support in Developing Countries: Labor Supply, Intergenerational Transfers and Living Arrangements," IZA Discussion Papers 289, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp289
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    Citations

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    Cited by:

    1. Partha Deb & Cagla Okten & Una Osili, 2010. "Giving to family versus giving to the community within and across generations," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(3), pages 963-987, June.
    2. Eric V. Edmonds & Kristin Mammen & Douglas L. Miller, 2005. "Rearranging the Family?: Income Support and Elderly Living Arrangements in a Low-Income Country," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    3. Matthieu Delpierre & Arnaud Dupuy & Michel Tenikue & Bertrand Verheyden, 2017. "The education motive for migrant remittances - Theory and evidence from India," DEM Discussion Paper Series 17-13, Department of Economics at the University of Luxembourg.
    4. John Gibson & Susan Olivia & Scott Rozelle, 2011. "How widespread are nonlinear crowding out effects? The response of private transfers to income in four developing countries," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 4053-4068.
    5. Witoelar, Firman, 2005. "Inter-household Allocations within Extended Family: Evidence from the Indonesia Family Life Survey," Center Discussion Papers 28472, Yale University, Economic Growth Center.
    6. Ha Trong Nguyen & Amy Y.C. Liu & Alison L. Booth, 2012. "Monetary Transfers from Children and the Labour Supply of Elderly Parents: Evidence from Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 48(8), pages 1177-1191, March.
    7. Miguel, Edward A. & Gertler, Paul & Levine, David I., 2003. "Did Industrialization Destroy Social Capital in Indonesia?," Center for International and Development Economics Research, Working Paper Series qt9kt2m860, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    8. 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.
    9. Barrientos, Armando, 2002. "Comparing Pension Schemes in Chile, Singapore, Brazil and South Africa," General Discussion Papers 30560, University of Manchester, Institute for Development Policy and Management (IDPM).
    10. Firman Witoelar, 2013. "Risk Sharing within the Extended Family: Evidence from the Indonesia Family Life Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 62(1), pages 65-94.
    11. Murrugarra, Edmundo, 2011. "Employability and productivity among older workers : apolicy framework and evidence from Latin America," Social Protection Discussion Papers and Notes 63230, The World Bank.
    12. Avraham Ebenstein & Steven Leung, 2010. "Son Preference and Access to Social Insurance: Evidence from China's Rural Pension Program," Population and Development Review, The Population Council, Inc., vol. 36(1), pages 47-70, March.
    13. Luigi, Cannnari & Giovanni, D'Alessio, 2008. "Intergenerational Transfers in Italy," MPRA Paper 15111, University Library of Munich, Germany.
    14. 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.
    15. Maliki, 2008. "Health Card And Health Care Facilities Demand Among The Indonesian Elderly," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 53(01), pages 103-119.
    16. Gary S. Becker & Kevin M. Murphy & Jörg L. Spenkuch, 2016. "The Manipulation of Children's Preferences, Old-Age Support, and Investment in Children's Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 34(S2), pages 3-30.

    More about this item

    Keywords

    old age support; Intergenerational transfers; elderly labor supply;
    All these keywords.

    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; Non-Labor Market Discrimination

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