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The Motives Of Intergenerational Transfer To The Elderly Parents In China: Consequences Of High Medical Expenditure

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  • Xiaoyu Wu
  • Lixing Li

Abstract

The support for the elderly is facing big challenges with the problem of population aging. Transfers from adult children could partly insure elderly parents against low income and high medical expenditure. There are two main motives for transfers in the literature, namely altruism and exchange. By using data from a new household survey of people aged 45 years and above in China, we estimate the transfer derivatives with the adjustment of medical expenditure in elderly parents' income. We find a large negative impact of adjusted income on transfers at the lower end of income distribution, which is consistent with the altruistic motive. Evidence on the exchange motive is found only for sons, but not for daughters. In addition, there is evidence on the ‘exchange‐for‐service’ motive, which interprets transfer as a payment to parents' family services, such as taking care of grandchildren. Copyright © 2013 John Wiley & Sons, Ltd.

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  • Xiaoyu Wu & Lixing Li, 2014. "The Motives Of Intergenerational Transfer To The Elderly Parents In China: Consequences Of High Medical Expenditure," Health Economics, John Wiley & Sons, Ltd., vol. 23(6), pages 631-652, June.
  • Handle: RePEc:wly:hlthec:v:23:y:2014:i:6:p:631-652
    DOI: 10.1002/hec.2943
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    References listed on IDEAS

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    Cited by:

    1. Xiaoyu Wu & Jianmei Zhao, 2020. "Risk sharing, siblings, and household equity investment: evidence from urban China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 461-482, April.
    2. Oliveira, Jaqueline, 2016. "The value of children: Inter-generational support, fertility, and human capital," Journal of Development Economics, Elsevier, vol. 120(C), pages 1-16.
    3. Murphy, Adrianna & Kowal, Paul & Albertini, Marco & Rechel, Bernd & Chatterji, Somnath & Hanson, Kara, 2018. "Family transfers and long-term care: An analysis of the WHO Study on global AGEing and adult health (SAGE)," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 195-201.
    4. Li, Lixing & Wu, Xiaoyu, 2019. "Housing price and intergenerational co-residence in urban China," Journal of Housing Economics, Elsevier, vol. 45(C), pages 1-1.
    5. Fan, Yi & Yi, Junjian & Yuan, Ye & Zhang, Junsen, 2018. "The glorified mothers of sons: Evidence from child sex composition and parental time allocation in rural China," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 249-260.

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