Intergenerational transfers in long term care

How are parental inter-vivos transfers to their children and children’s informal care of parents influenced by personal characteristics, family conditions and state specific long term care policies? AHEAD data from 1993 and 1995 and a two-party choice model are used to guide the estimation of OLS and binary logit models of the amount and likelihood of inter-vivos transfers to children and informal care of parents. Results suggest that both parents’ characteristics and their offspring’s characteristics affect parental gifts to children and children’s time assistance to their parents, highlighting the interdependent nature of these decisions. Furthermore, though state policies did not consistently affect parental gift giving, the availability of state respite care support -short-term “breaks” for informal family caregivers- (1 % significance level) and adult day care centers (5 % significance level) were positively related to the amount and likelihood of children’s time assistance to their parents. These findings highlight the importance of some state programs such as respite care support in encouraging intra-family support for the elderly. Support for programs that reduce the caregiving burden may encourage more children to care for their elderly parents.