Social interaction effects in an inter-generational model of informal care giving

Lisa Callegaro and Giacomo Pasini
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Lisa Callegaro: Department of Economics, University Of Venice C� Foscari

No 2007_10, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: We study jointly the health perception of the elderly and the care giving decision of their adult children. Social interactions play a crucial role: elder parents' health perception depends on relations with household members. On the other hand adult children make their care giving decisions strategically, meaning that each of them considers his siblings' decision. We find empirical evidence which support this claim using the 2004 wave of the SHARE survey. We estimate social interaction effects by means of methods taken from the spatial econometric literature. Health perception relation with care giving depends on the determinants of adult children's decision to care: Parents' health may be modelled as a common good for parents and children; the latter's decision may be driven by bequest motives or by pure altruism and/or cultural values. We test implications of the model thanks to the unique features of the SHARE dataset: it is trans--national, allowing to control for cultural and institutional differences, it contains information on health status of over-50 Europeans and details on their social and intergenerational relations.

Keywords: Insurance; Social SHARE; care giving; social interactions; health; aging (search for similar items in EconPapers)
JEL-codes: L26 (search for similar items in EconPapers)
Pages: 27
Date: 2007
New Economics Papers: this item is included in nep-ias and nep-soc
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Citations: View citations in EconPapers (15)

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