Old-Age Support in Developing Countries: Labor Supply, Intergenerational Transfers and Living Arrangements

46 Pages Posted: 23 Jan 2001  

Lisa A. Cameron

Monash University - Department of Econometrics; IZA Institute of Labor Economics; J-PAL

Deborah A. Cobb-Clark

School of Economics, University of Sydney; IZA Institute of Labor Economics

Date Written: April 2001

Abstract

Without broad-based public pension schemes, the majority of the elderly in developing countries are left to rely on their own current and accumulated earnings and support from children as means of old-age support. We develop a cooperative bargaining model that allows us to jointly estimate the determinants of coresidency, financial transfers from non-coresiding children, and the labor-supply of elderly Indonesians. We find that many Indonesians, especially men, continue to work well into old age even if they are living with their adult children. There is little evidence that transfers are a substitute for the income support provided by the elderly parent's own labor supply. Transfers are associated with a decline in hours of work only for non-coresiding mothers. Furthermore, transfers are not strongly related to parental need or the ability of the child to give.

Keywords: Aging, Intergenerational Transfers, Labor Supply, Coresidency, Development, Indonesia

JEL Classification: J14, O15, J22, J12

Suggested Citation

Cameron, Lisa A. and Cobb-Clark, Deborah A., Old-Age Support in Developing Countries: Labor Supply, Intergenerational Transfers and Living Arrangements (April 2001). IZA Discussion Paper No. 289; U of Melbourne, Dept. of Econ. Working Paper No. 773. Available at SSRN: https://ssrn.com/abstract=257404

Lisa A. Cameron (Contact Author)

Monash University - Department of Econometrics ( email )

Monash University
Clayton Campus
Melbourne, 3800
Australia
+61 3 9905 5438 (Phone)
+61 3 9905 5474 (Fax)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=744

J-PAL ( email )

66 bis avenue Jean Moulin
Paris, 75014
France

HOME PAGE: http://www.povertyactionlab.org/cameron

Deborah A. Cobb-Clark

School of Economics, University of Sydney ( email )

Rm 370 Merewether (H04)
Sydney, NSW 2006 2008
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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