Descriptive statistics

Table 3.3 shows the incidence of earmarked transfers is substantial: about 12% of the married couples in the sample received financial support from parents or in-laws in 1998 and this figure marginally shrinks to 8% in 2003.

Table 3.3: Monetary transfer from parents and in-laws

Money Help Year

1998 2003 Total No 87.91 91.90 89.55 [Obs.] [6,124] [4,469] [10,593] Yes 12.09 8.10 10.45 [Obs.] [842] [394] [1,236] Total 6966 4863 11829

Source: Multipurpose Survey on Family and Child- hood Conditions Dataset (1998 and 2003). In squared brackets I show the numbers of observed adult couples.

Then, I analyse the trend of the intergenerational transfer from parents to adult children over time. Figure 3.2 shows the percentage of couples who received transfer from parents during the period 1965-2000. The variable of interest evolves following an increasing trend and it reaches the local pick after each period of economic downturn (such as OPEC oil price shock in the early 70s and it grows again during the 90s when

Italy decided to devalue Italian Lira by 7%).13 Several authors have recognized the

role of the family as an insurance mechanism against different risks or misadventures (Altonji et al., 1997). Better knowledge of the criteria used by families, and especially parents, to provide financial support for their adult children would improve decision-

12

I provide all set of covariates in Table D.1.

13_{In the empirical Section, I statistically test the presence of possible cohort effect. I set age groups}

every ten years from 1930 to 1980 and I test the joint significance of the parameters. In all the specifi- cations, I could not reject H0 (all the parameters equal to zero) with a F-test with prob(0.62). Similar

results in case in which I select groups of five years. Then, once I account for all the set of covariates, the cohort effects are not statistically different from zero.

makers’ ability to design effective social programs that improve the quality of life of more vulnerable individuals.

Figure 3.2: Percentage of adult children who have received a transfer from parents, Multipurpose 1998/2003

0

.2

.4

.6

Help from parents or in−law

1965 1970 1975 1980 1985 1990 1995 2000

Year of difficulty

The data show an increasing trend of the percentage of people who receive a tied transfer from parents or in-laws till the mid-1980s and then it stabilizes in the last 15 years. Then I focus on the relationship between geographical location between parents and adult children because the distance itself may be one of the most important driving forces. Geographical proximity between generations is one of the possible links between tied transfer and the reproduction of the familistic welfare system. Figure 3.3 describes the current distance between wife and husband and their corrispondent parents by help received (“No transfer” and “Received transfer”). As I explained in the previous Section, the information is reported as a categorical variable and I define the distance as the minimum value between the adult residence and their parents or in-laws. In Figure 3.3. I describe two cases: adult children who did not receive any transfer from parents and adult children who did.

Panel A describes the current distance of the wives with respect to her parents, while Panel B refers to the husbands, in order to control for parents and in-laws geographical proximity. In Panel A, I observe that the wives who receive monetary help from their parents are more likely to live closer to them compared to their counterparts. In fact, around 13% of the adult children who receive a transfer live in the same building as their parents and only 10% do so when they do not receive any transfer. In Panel B, I observe a different pattern in the first geographical category. Considering individuals

Figure 3.3: Current geographical distance to parents or in-laws by help received, Mul- tiscopo 1998/2003 10.50 26.89 25.65 15.82 10.17 10.97 13.28 28.98 23.08 14.86 8.22 11.59 0 10 20 30 1 2 3 4 5 6 1 2 3 4 5 6

No transfer Received transfer

Percent Distance to parents 1 same bldg 2 in twn <1km 3 in twn >1km 4 out twn <16km 5 out twn 16−50 6 out twn >50km

(a) Panel A: wife distance from parents

16.29 29.85 24.48 12.10 6.93 10.35 12.22 30.66 28.06 12.22 7.21 9.62 0 10 20 30 1 2 3 4 5 6 1 2 3 4 5 6

No transfer Received transfer

Percent Distance to parents 1 same bldg 2 in twn <1km 3 in twn >1km 4 out twn <16km 5 out twn 16−50 6 out twn >50km

(b) Panel B: husband distance from parents

in the same parents building those who did not receive any financial help slightly tends to locate closer to their parents, around 16% and 12% respectively. It appears indeed consistent with Panel A once the distance becomes greater than the “same bldg”.

Next, I determine whether residential proximity between generations - in the case of help received from parents during economic hardship - is related to the future exchange in services both the elderly and the grandchildren care. Figure 3.4 shows large differences between the two groups (“No transfer” and “Received transfer”): in fact, the percentage providing elderly care to parents is always higher no matter the distance (to parents or in-laws). When distance is equal to the first category ”same building”, individuals who receive the trasfer from their parents seem to provide about 11% more informal care than

their counterparts who did not receive any transfers.14 _{For any other category, the adult}

children provide, on average, 5-6% more elderly care than couples who do not receive the transfer. Those who received the monetary help provide more elderly care and this effect decreases when the distance become greater than 16 Km (10 percentage points less). As for the individuals who did not receive the money help, I do not observe a persistent trend between distance and elderly care. This picture suggests that the distance is not strongly (negatively) correlated with elderly care for the subgroup of individuals who have not been helped by their parents. The effect seems almost constant across distance categories. In other words, evidence suggests that (i) no matter the distance, those who receive the money from parents also provide more elderly care later on in life; (ii) the distance seems negatively correlated with the provision of elderly care only in the case of adult children who have received the financial help from parents.

Figure 3.4: Percentage providing informal care to parents or in-laws (ICP), by current distance to them and by help received, Multiscopo 1998/2003

0.09 0.14 0.16 0.25 0.28 0.33 0.06 0.12 0.19 0.19 0.21 0.22 0 .1 .2 .3 .4

% providing informal care Received transfer No transfer out twn >50km out twn 16−50 out twn <16km in twn >1km in twn <1km same bldg out twn >50km out twn 16−50 out twn <16km in twn >1km in twn <1km same bldg

Figure 3.5 shows the percentage of people receiving help with child-care from parents or in-laws distinguishing between adult children who received and those who did not. For any geographical location, those who received monetary transfer experience a higher percentage of grandchildren care from parents or in-laws with respect to the couples who did not. This picture leads to believe that (i) no matter the distance, who received the transfer are those who also currently receive more grandchildren care; (ii) the distance

seems more relevant in explaining the relationship in case of “No transfer” received than the counterpart. For instance, considering only the first distance (“same bldg”), I observe a 2 percentage points difference between the two categories and this divergence increases when distance from parents becomes greater. In Figure 3.5 the No transfer couples show a strong and negative correlation between the distance to parents and the probability of grandchildren care received while who Received transfer increases the exchange in informal care from parents than the other group, no matter the geographical distance I account for. All these figures show that, on average, the adult child who receives the monetary transfer from parents or in-laws will exchange more informal care later on in life while the proximity to parents does not entirely explain the exchange itself.

Figure 3.5: Percentage receiving informal care from parents or in-laws (ICR), by help received, Multiscopo 1998/2003 0.12 0.17 0.50 0.49 0.51 0.53 0.05 0.19 0.33 0.38 0.45 0.51 0 .1 .2 .3 .4 .5

% receiving informal care Received transfer No transfer out twn >50km out twn 16−50 out twn <16km in twn >1km in twn <1km same bldg out twn >50km out twn 16−50 out twn <16km in twn >1km in twn <1km same bldg