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Spillover Effects of Old-Age Pension Across Generations: Family Labor Supply and Child Outcomes

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  • Katja M. Kaufmann

  • Yasemin Özdemir

  • Han Ye

Abstract

We study the impact of grandparental retirement decisions on family members’ labor supply and child outcomes by exploiting a Dutch pension reform and a fuzzy Regression Discontinuity design. We find that a one-hour increase in grandmothers’ hours worked causes their adult daughters with young children to work 40 minutes less. Daughters without children, with older children and sons/daughters-in-law are not affected. Examining the reform impacts on grandchildren’s test scores, we find positive effects on children aged 4-7, who experienced a substitution from grandparental to maternal care. We also show negative effects for children aged 8-12, for whom grandparental childcare was substituted for by formal or no care.

Suggested Citation

  • Katja M. Kaufmann & Yasemin Özdemir & Han Ye, 2023. "Spillover Effects of Old-Age Pension Across Generations: Family Labor Supply and Child Outcomes," CRC TR 224 Discussion Paper Series crctr224_2023_403v3, University of Bonn and University of Mannheim, Germany, revised Oct 2025.
    • Handle: RePEc:bon:boncrc:crctr224_2023_403v3
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    2. Sturm, Patrick, 2025. "Workplace peer effects in retirement," W.E.P. - Würzburg Economic Papers 112, University of Würzburg, Department of Economics.
    3. Sencer Karademir & Jean-William Laliberté & Stefan Staubli, 2026. "The Multigenerational Impact of Children and Childcare Policies," Journal of Labor Economics, University of Chicago Press, vol. 44(1), pages 189-227.
    4. Mara Barschkett & C. Katharina Spiess & Elena Ziege, 2026. "The Generational Gift: The Effects of Grandparental Care on the Next Generations' Health and Well‐Being," Health Economics, John Wiley & Sons, Ltd., vol. 35(3), pages 522-547, March.
    5. Sona Badalyan, 2025. "Peer Effects in Old-Age Employment Among Women," CERGE-EI Working Papers wp800, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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    More about this item

    Keywords

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    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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