Intergenerational transfers within the family and the role for old age survival

Fanny A. Kluge and Tobias C. Vogt
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Fanny A. Kluge: Max Planck Institute for Demographic Research, Rostock, Germany
Tobias C. Vogt: Max Planck Institute for Demographic Research, Rostock, Germany

No WP-2020-021, MPIDR Working Papers from Max Planck Institute for Demographic Research, Rostock, Germany

Abstract: In this paper, we study the relationship between income and old age survival via the indirect pathway of private transfers. Our analysis focuses on intergenerational transfers in the family as an important, but so far less investigated, link between income and improved old age survival. We use an agent based model to simulate an exchange relationship between two generations in a family and incorporate realistic demographic, economic and time use data for Germany. We find that older parents transfer increasing shares of their pensions to their offspring and receive informal care or emotional support in return. This exchange motive is mutually beneficial as younger generations are in greater need for financial subsidies and older ones for contact and care. Our inductive approach adds to our understanding how income is spread in the family and how older family members can benefit from an exchange of money for care.

JEL-codes: J1 Z0 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2020
New Economics Papers: this item is included in nep-age, nep-cmp and nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:dem:wpaper:wp-2020-021

DOI: 10.4054/MPIDR-WP-2020-021

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