THE IMPACT OF LIVING ARRANGEMENTS OF OLDER PEOPLE ON INTERGENERATIONAL TRANSFERS FROM THEIR ADULT CHILDREN IN CHINA

Based on three waves of the nationally representative survey conducted in 2005, 2008-2009, and 2011-2012, this study investigates the effect of living arrangements on intergenerational transfers in China. Outcomes of interest include monetary transfers, contact, informal care, and emotional support that adult children provide to older parents. Both actual living arrangements and the discrepancy between actual and preferred living arrangements are considered. Endogeneity bias is accounted for through fixed-effects instrumental-variable regression modeling. It is found that co-residence serves as a substitute for monetary transfers and is positively associated with the probability that parents would receive contact, informal care and emotional support from adult children. Living alone with children in the same city is positively associated with the receipt of monetary transfers and contact by older parents but is not statistically related to the other two outcomes. There is an expressed desire for independent living among older people, which impacts transfer behaviors in a complex manner. This study provides a better understanding of the role of the family amidst ongoing social security reforms in China.