Motivation of Parent–Child Co‐residence Behavior: Evidence from the China Health and Retirement Longitudinal Study

Yijie Wang (), Wenkai Sun () and Xianghong Wang

China & World Economy, 2019, vol. 27, issue 2, 66-85

Abstract: This paper examines the motivations of parent‐child co‐residence behavior in China using data from the China Health and Retirement Longitudinal Study. We test three possible motives: social norms, self‐interest and altruism. We find that social norms play an important role in household co‐residence behavior, showing that the belief that “sons take care of parents” is strong, and children in different birth orders take different responsibilities. Taking the one‐child policy as a natural experiment, we compared co‐residence behavior between only‐child and multi‐child families. This allowed us to test whether children in multi‐child families with wealthier parents more often co‐reside in order to compete for a bequest. We find that parents' wealth is more appealing to children in multi‐child families. The results support the life cycle theory that co‐residence decisions are motivated by self‐interest. We also find some evidence of altruism when parents and children make co‐residence decisions. These findings provide some insights for designing future elder‐support policies in China.

Date: 2019
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