Financial Reciprocity and Elder Care: Understanding Multiple, Interdependent Resource Transfers

Maurice M. MacDonald, Iowa State University
Sun-Kang Koh, Sungshin Women's University

We developed nested logistic regression models for a sample from the Wisconsin Longitudinal Study to examine the influence of parent-to-child financial transfers and economic resources on child-to-parent financial transfers, caregiving, time help and co-residence as multiple, interdependent transfers from middle-aged adult children to their elderly parents. We find strong positive effects of prior parent-to-child financial transfers in the models of caregiving, time help, and co-residence but no effect on child-to parent financial transfers. Coresidence, caregiving, and time-help are complements but we do not find interdependence between child-to-parent financial transfers and caregiving or time-help. Caregivers have less education and more long-term health problems than their peers. We interpret the effects of parents' incomes and net worth as evidence about motives for transfers to them, and find compensatory altruism for financial transfers but exchange motives for time help. We speculate about the relevance of our results for elder care policy.