Intergenerational Financial Transfers Research Articles

Measuring intergenerational financial support: Analysis of two cross-national surveys

Background: The last decade has seen considerable research into intergenerational financial transfers in Europe. This research has produced significant insights into the nature, causes, and consequences of such transfers, as well as evidence of cross-national variation. Yet the findings of this research field are almost exclusively based on data from the Survey of Health, Ageing, and Retirement in Europe (SHARE). The dependency on SHARE data and this specific methodological approach may limit the inferences made by researchers examining intergenerational transfers in Europe. Objective: This paper aims to explore whether instruments designed to measure intergenerational financial transfers are sensitive to various methodological parameters. Specifically, whether the prompts, reference period, and respondent identity affect the number and size of transfers that are reported. Methods: To achieve this we compare data from SHARE and the Generations and Gender Programme (GGP) using Propensity Score Matching to identify which survey reports the most transfers and whether these differences are stable across sub-groups. We also utilise specific features of SHARE and the GGP to examine whether variations in the reference period or asking the transfer giver or receiver affects the level of behaviour reported. Results: The results show that the instruments are highly sensitive to changes in wording, the reference period, and the identity of the respondent. This suggests that existing findings in the literature may be sensitive to the specific methodology used by SHARE. Conclusions: Whilst SHARE is an excellent data source, we would encourage studies of intergenerational transfers to validate their findings with multiple data sources.

Intergenerational Transfers Between Parents and Their Multiple Adult Children in South Korea

Abstract Guided by the exchange model, altruistic model, intergenerational solidarity theory, and cultural contexts, this study explored the determinants of financial intergenerational transfers between older parents and adult children in South Korea. We examined 18,820 parent-child dyads by using random-effects models on the first wave of the Korean Longitudinal Study of Ageing (KLoSA) data. Findings showed that downward financial intergenerational transfers were consistent with the self-interest exchange model but upward transfers did not support microeconomic theories. Family solidarity theory was generally supported by downward transfers but geographical proximity was not positively associated with upward transfers. Lastly, cultural contextual variables such as marital status, birth order, and sex of a child were found to be significant. Parents tended to both provide and receive more financial support from unmarried children than from married children. Within the same marital status, the hierarchy existed in order of the first-born son, the second or later sons, and daughters when it came to downward financial transfers. Regarding upward financial transfers, the preference in order was more complicated. The findings of this study help in understanding the intergenerational financial transfers in the Korean context.

중년기 가정의 자산과 3세대 간 경제자원 이전

Financial transfers between parents and their adult children are a growing trend in Korean society. This study investigates the relation of household assets to intergenerational financial transfers among the middle-aged and focuses on the influences of various types of assets on financial transfers from the middle-aged to their older parents and adult children. The paper presents an analysis of data from the second wave of KReIS on the financial transfers provided by those aged 50-69 years to their parents and children. The results show that around one-fifth of the respondents reported providing financial resource transfers to their parents, and that about one-third of the respondents provided financial transfers to their children. In terms of the other direction of financial transfers, a small percentage of the respondents received financial transfers from their parents; otherwise more than half of the respondents reported receiving financial transfers from their children. The influences of various types of assets are statistically significant on financial transfers to parents, to adult children and from adult children. Specifically the size of financial assets is associated with a likelihood of providing financial resource to both parents and children.

Factors Associated with Intergenerational Social Support among Older Adults across the World

There has been an increasing interest among social scientists with regard to the role of socioeconomic, demographic, and cultural situations on intergenerational financial, help and care transfers in society. With the rapid pace of socioeconomic development, both populations and societies in transition in many parts of the world, traditional values and family dynamics are being affected. Although some researchers have attempted to explore the changing pattern of intergenerational transfers for specific geographical locations, there has been no global comparison yet made due either to an inadequate data set or its total lack. Utilising the 2007 Global Ageing Survey (GLAS), this study attempts to examine important determinants of financial transfers as well as help and care transfers among individuals aged between 40 and 79 years living across 21 countries and territories in five major regions of the world. In the present study, it has been found that a respondent’s age, gender, household size, health appraisal, education, employment status, marital status, contact between generations and geographical location are key factors affecting the intergenerational support (financial, help and care). Analyses have been made at regional and country levels providing robust and reliable estimates. This enables us to reach more effective conclusions on populations overall as well as on specific geographical settings. Some policy recommendations and future research directions are put forward in the last part of this paper.

Intergenerational transfers in the era of HIV/AIDS: Evidence from rural Malawi.

Intergenerational transfer patterns in sub-Saharan Africa are poorly understood, despite the alleged importance of support networks to ameliorate the complex implications of the HIV/AIDS epidemic for families. There is a considerable need for research on intergenerational support networks and transfers to better understand the mechanisms through which extended families cope with the HIV/AIDS epidemic and potentially alleviate some of its consequences in sub-Saharan Africa, and to comprehend how transfers respond-or not-to perceptions about own and other family members' health. Using the 2008 round of the Malawi Longitudinal Study of Families and Health (MLSFH), we estimate the age patterns and the multiple directions of financial and non-financial transfer flows in rural Malawi-from prime-aged respondents to their elderly parents and adult children age 15 and up. We also estimate the social, demographic and economic correlates of financial and non-financial transfers of financial intergenerational transfers in this context. Our findings are that: (1) intergenerational financial and non-financial transfers are widespread and a key characteristic of family relationships in rural Malawi; (2) downward and upward transfers are importantly constrained and determined by the availability of transfer partners (parents or adult children); (3) financial net transfers are strongly age-patterned and the middle generations are net-providers of transfers; (4) non-financial transfers are based on mutual assistance rather than reallocation of resources; and (5) intergenerational transfers are generally not related to health status, including HIV positive status.

Intergenerational financial transfers and health in a national sample from France

Financial transfers from parents to their adult children are a growing trend in contemporary societies, and this study investigates the relation of those transfers to their beneficiaries' health in France. In the 2005 nationally representative Gender and Generation Survey, nearly 6% of the subjects aged 25–49 years reported having received financial transfers during the last 12 months. Subjects who had achieved intergenerational upward mobility as well as those who had remained in the upper class were more likely to receive transfers, suggesting that parents rewarded those of their children who achieved most social success. After adjusting for a wide range of socio-demographic factors, subjects who had been given large transfers were much more likely to report very good health than subjects who had not been given anything. Findings were interpreted within the framework of sociological research on intergenerational transfers and that of lifecourse epidemiology.

The Motivation for Intergenerational Time and Financial Transfers

This study investigated the motivation for intergenerational financial and time transfers between parents and adult children using data from the Health and Retirement Study. The results showed that emotional closeness between parents and adult children was significantly associated with both adult children to parent and parent to adult children transfers. In addition, parents and adult children who met frequently were more likely to help each other by making financial or time transfers. Also, financial transfers between parents and adult children were motivated by the donor’s altruism to the disadvantaged adult children or parents. However, wealthier parents and adult children with full‐time jobs were less likely to make time transfers. The results of this study help in understanding the motivation for various types of intergenerational transfers in an aging society.

Number of Children and Upstream Intergenerational Financial Transfers: Evidence From Hong Kong

This study examined financial transfers from adult children to elderly parents in Hong Kong and tested three hypotheses about the motives for such transfers. We address previous research, suggesting that family financial support for retirees will decline in the coming decades as a consequence of the reduction in the fertility rate; we also examine whether financial transfers are a function of the number of adult children in the family. We used multiple regression models based on data from a representative sample of parents aged 60 years and older to identify the correlates of the amount of transfers from adult children to their elderly parents. We found evidence for the hypothesis that upstream transfers to elderly parents are their way of withdrawing savings from a "support bank" in which they made contribution for their children's education earlier in life and that transfers are altruistic in nature, but our results provide only moderate support to the old age security hypothesis that perceives family as a source of capital. The number of children has a ceiling effect on transfers, which calls into question common assumptions about the extent to which the decline in fertility will pose a severe threat to the extent of familial support of older persons over the coming decades.

Parental Repayment Hypothesis in Intergenerational Financial Transfers from Adult Children to Elderly Parents: Evidence from Hong Kong

This study examined financial transfers from adult children to non-co-resided elderly parents in Hong Kong, and it tested the parental repayment hypothesis regarding motives for transfers. Specifically, the research question is whether financial transfers are a function of the education or earning capacity of adult children. Based on data from a representative sample of adult children who provided financial support to their elderly parents aged 60 and above, we used multiple regression models to identify the correlates of the amount of transfers from children to their mother or father living apart. We found evidence supporting the parental repayment hypothesis, that providing security in old age is the children's repayment for parental investment in their education. There is only a weak relation between the number of children and the transfers. This calls into question common assumptions about the extent to which a decline in fertility poses a threat to the extent of familial support of older persons in the coming decades.

European patterns of intergenerational financial and time transfers.

The ageing of the European population is expected to strongly influence both the structure of family relations and the pattern of private transfers between generations. Using data from the Survey of Health, Ageing and Retirement in Europe conducted from the perspective of adults aged 50 and above in ten European countries, we provide an analysis of financial and time transfers, either given or received. Our results show that cash gifts mainly flow to the younger generations, while time transfers are directed both upwards and downwards. When comparing the countries, we find some remarkable similarity in the pattern of transfers, although there are inter-country differences. These differences sometimes follow the expected north-south European gradient, but not always. The results suggest that the social and demographic transformations currently taking place in Europe often have contradictory and paradoxical effects upon the nature of intergenerational exchanges.

Helping to Build and Rebuild Secure Lives and Futures: Financial Transfers from Parents to Adult Children and Grandchildren

This paper explores intergenerational financial transfers from parents to adult children and grandchildren within a life course perspective. Research on intergenerational financial transfers has been sparse, and little is known about the financial support older Canadians provide to family members or about the meaning of that assistance. Survey data from a convenience sample of older Canadians was analysed to determine the types of financial assistance older persons provide, what motivates them to provide this assistance, and what meanings such transfers have for the older persons themselves. Findings suggest that it is often events and transitions in the lives of adult children that shape the financial assistance that is needed and given within these families. Older parents demonstrate a strong desire to help their children and grandchildren through important or difficult transitions to "build or rebuild secure lives and futures". Parents' assistance is also influenced by their own family history of assistance and their desire to pass on an early inheritance during their lifetime.

Intergenerational Support and the Life-Cycle Incomes of Young Men and Their Parents: Human Capital Investments, Coresidence, and Intergenerational Financial Transfers

This article examines the resource allocations of parents in the form of both shared residence with and financial transfers to their young adult sons. Based on an overlapping generations model incorporating a game between parents and adult children, estimates of the determinants of such transfers are obtained from the kinship-linked cohorts of the National Longitudinal Surveys. The estimates suggest that both types of parental assistance are as important as governmental transfers in supporting young men and are responsive to the current and anticipated earnings of their offspring, suggesting that young men cannot adequately smooth their consumption without parental help.