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Do Siblings Free-Ride in "Being There" for Parents?

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  • Shiko Maruyama

    ()
    (School of Economics, the University of New South Wales)

  • Meliyanni Johar

Abstract

When siblings are concerned for the well-being of their elderly parents, the costs of caregiving and long-term commitment create a free-rider problem. If siblings living near their parents can share the costs, this positive externality exacerbates the under-provision of proximate living. Location decisions allow siblings to make a commitment to not provide long-term support for parents, and if decisions are made in birth order, elder siblings may enjoy the first-move advantage. To quantify these e¤ects, we study siblings?location decisions relative to parents by estimating a sequential participation game that features rich heterogeneity. We find moderate altruism and cooperation in the US that imply: (1) limited strategic behavior: more than 90% of children have a dominant strategy; and (2) non-negligible free-riding: of the families with multiple children, had siblings fully internalized externality and jointly maximized their utility, 18.3% more parents would have had at least one child nearby.

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File URL: http://research.economics.unsw.edu.au/RePEc/papers/2013-06.pdf
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Bibliographic Info

Paper provided by School of Economics, The University of New South Wales in its series Discussion Papers with number 2013-06.

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Length: 57 pages
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:swe:wpaper:2013-06

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  1. Hiedemann, Bridget & Stern, Steven, 1999. "Strategic play among family members when making long-term care decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 40(1), pages 29-57, September.
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  7. Meliyanni Johar & Shiko Maruyama, 2011. "Intergenerational cohabitation in modern Indonesia: filial support and dependence," Health Economics, John Wiley & Sons, Ltd., vol. 20(S1), pages 87-104, 09.
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Cited by:
  1. Shiko Maruyama, 2010. "Estimation of Finite Sequential Games," Discussion Papers 2010-22, School of Economics, The University of New South Wales.

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