Public transfers and the balance of intergenerational family support in Europe

Abstract:

To capture the simultaneity of changes in different types of family transfers and describe the pattern of rebalancing of intergenerational family support in response to variation in public support, it is important to study bidirectional flows of resources between family generations. This study uses data on 13 European countries to estimate the net value of transfers between parents and adult children and to determine the relationship of the net value of family transfers with public intergenerational transfers. Individual-level data come from the Survey of Health, Ageing, and Retirement in Europe, and are supplemented with the country-level information from the Organisation for Economic Co-operation and Development, United Nations, and national statistical offices. Multilevel models are estimated to account for the nested structure of data. The results suggest that the needs of parents and children and their ability to provide support are important determinants of the flow of net transfers between parents and children. Public intergenerational transfers to the generation of older parents and/or their adult children are associated with a secondary redistribution of support at the family level from persons belonging to the generation that benefits relatively more from public transfers to those belonging to the other generation.