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

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Author Info

  • Cameron, Lisa A.

    ()
    (Monash University)

  • Cobb-Clark, Deborah A.

    ()
    (University of Melbourne)

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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 289.

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Length: 47 pages
Date of creation: Apr 2001
Date of revision:
Publication status: published as 'Do coresidency and financial transfers from the children reduce the need for elderly parents to works in developing countries?' in : Journal of Population Economics, 2008, 21(4), 1007-1033
Handle: RePEc:iza:izadps:dp289

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Keywords: old age support; Intergenerational transfers; elderly labor supply;

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Cited by:
  1. Edward Miguel & Paul Gertler & David Levine, 2004. "Did Industrialization Destroy Social Capital in Indonesia?," Development and Comp Systems, EconWPA 0407006, EconWPA.
  2. Chung Tran, 2008. "Transfers and Labor Market Behavior of the Elderly in Developing Countries: Theory and Evidence from Vietnam," Caepr Working Papers, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington 2008-018, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
  3. Partha Deb & Cagla Okten & Una Okonkwo Osili, 2002. "Giving to Family versus Giving to the Community Within and Across Generations," Economics Working Paper Archive at Hunter College, Hunter College Department of Economics 02/6, Hunter College Department of Economics.
  4. 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).
  5. 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.
  6. Luigi, Cannnari & Giovanni, D'Alessio, 2008. "Intergenerational Transfers in Italy," MPRA Paper 15111, University Library of Munich, Germany.
  7. Firman Witoelar, 2005. "Inter-household Allocations within Extended Family: Evidence from the Indonesia Family Life Survey," Working Papers, Economic Growth Center, Yale University 912, Economic Growth Center, Yale University.
  8. 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, Taylor & Francis Journals, vol. 48(8), pages 1177-1191, March.
  9. Murrugarra, Edmundo, 2011. "Employability and productivity among older workers : apolicy framework and evidence from Latin America," Social Protection Discussion Papers 63230, The World Bank.
  10. Barrientos, Armando, 2002. "Comparing Pension Schemes in Chile, Singapore, Brazil and South Africa," General Discussion Papers, University of Manchester, Institute for Development Policy and Management (IDPM) 30560, University of Manchester, Institute for Development Policy and Management (IDPM).

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