The Economics Seminar Series brings guest speakers from universities, government agencies and research institutions around the world to VCU Business to share current research across a range of economic topics.

Join us for a research seminar with Ami Ko, Ph.D., of Georgetown University, presenting “Intergenerational Time Transfers: Altruism and Strategic Motives within the Family.”

Abstract

Extended families provide a large share of both childcare for young children and long-term care (LTC) for elderly parents. These intergenerational time transfers are often bidirectional over the life cycle, raising the question of whether they reflect altruism or strategic exchange. We study the motives underlying these transfers and their policy implications.

Using data from the Health and Retirement Study and plausibly exogenous variation in childcare costs, we document evidence consistent with implicit family contracts in which early child care assistance is later reciprocated through elderly care. Motivated by these findings, we build and estimate a dynamic non-cooperative model of an extended family that chooses care arrangements, labor supply, savings, and bequests under both altruistic and strategic motives.

The estimated model shows that strategic motives play an important role in shaping the intertemporal linkage between childcare and LTC. These dynamics generate policy spillovers across care sectors. Child care subsidies crowd out grandparental childcare and reduce the future LTC provided by adult children, whereas policies that condition old-age benefits on past childcare provision strengthen family-based care in both stages.

Overall, the results highlight how dynamic family incentives shape caregiving and mediate the effects of care policies.