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Living Conditions of Children and Parental Well-Being – Evidence from German Data on Life Satisfaction

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  • Schwarze, Johannes

    (University of Bamberg)

Abstract

The question that this paper addresses is whether or not parents are altruistic towards their children. A new approach will be introduced, where the life satisfaction data of parents will be regressed onto the living conditions of their children who now live independently. After controlling for unobserved household characteristics, no positive effect of children’s actual household income on parents’ satisfaction can be found. However, children’s health and education have a positive impact on parental well-being. Both can be interpreted as an approximation of children’s lifetime incomes. We also regress parental life satisfaction on the predicted life satisfaction of their children. A significant positive effect can be found, which can be interpreted as weak evidence for parental altruism. The paper uses data from the German Socio-Economic Panel Study (SOEP).

Suggested Citation

  • Schwarze, Johannes, 2004. "Living Conditions of Children and Parental Well-Being – Evidence from German Data on Life Satisfaction," IZA Discussion Papers 1200, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1200
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    References listed on IDEAS

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    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Sumon K. Bhaumik, 2001. "Intergenerational transfers: the ignored role of time," MPIDR Working Papers WP-2001-008, Max Planck Institute for Demographic Research, Rostock, Germany.
    3. Johannes Schwarze, 2003. "Using Panel Data on Income Satisfaction to Estimate Equivalence Scale Elasticity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(3), pages 359-372, September.
    4. Johannes Schwarze & Hanfried H. Andersen & Silke Anger, 2000. "Self-Rated Health and Changes in Self-Rated Health as Predictors of Mortality: First Evidence from German Panel Data," Discussion Papers of DIW Berlin 203, DIW Berlin, German Institute for Economic Research.
    5. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-1198, December.
    6. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    7. Rainer Winkelmann, 2005. "Subjective well-being and the family: Results from an ordered probit model with multiple random effects," Empirical Economics, Springer, vol. 30(3), pages 749-761, October.
    8. Mohamed Jellal & Francois-Charles Wolff, 2002. "Altruistic Bequests with Inherited Tastes," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 95-113, August.
    9. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1997. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1121-1166, December.
    10. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-546, June.
    11. Alain Jousten & Barbara Lipszyc & Maurice Marchand & Pierre Pestieau, 2005. "Long-term Care Insurance and Optimal Taxation for Altruistic Children," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(1), pages 1-1, March.
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    Cited by:

    1. Jose Alberto Molina & Maria Navarro & Ian Walker, 2007. "Mums and their sons; Dads and their daughters: Panel Data Evidence of Parental Altruism across 14 EU Countries," Working Papers 200721, Geary Institute, University College Dublin.
    2. Inmaculada García & José Molina & María Navarro, 2007. "How Satisfied are Spouses with their Leisure Time? Evidence from Europe," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 546-565, December.
    3. Inmaculada Garcia & Jose-Alberto Molina & Maria Navarro, 2010. "The effects of education on spouses' satisfaction in Europe," Applied Economics, Taylor & Francis Journals, vol. 42(28), pages 3607-3618.

    More about this item

    Keywords

    family; altruism; life satisfaction; health and random effects;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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