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Deborah Cobb-Clark The Australian National University

The Role of Transfers from Children and Own Labor Supply in Supporting the Elderly in Indonesia and Vietnam. Deborah Cobb-Clark The Australian National University Family Support Networks and Population Ageing, Doha Qatar 3 -4 June 2009

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Deborah Cobb-Clark The Australian National University

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  1. The Role of Transfers from Children and Own Labor Supply in Supporting the Elderly in Indonesia and Vietnam Deborah Cobb-Clark The Australian National University Family Support Networks and Population Ageing, Doha Qatar 3 -4 June 2009 United Nations Population Fund (UNFPA) and Doha International Institute for Family Studies and Development

  2. Overview • Compare the results of two recent studies , Cameron and Cobb- Clark (2008) and Nguyen (2009) which examine the relationship between intergenerational transfers and the labor supply of the elderly in Indonesia and Vietnam. • These two countries provide interesting cases for studying this issue because: • Very detailed micro-data, in particular financial transfers from non-co-resident children, exist. • Population ageing is a pressing issue in both countries.

  3. Overview • Both studies formally model elderly labor supply taking account of the simultaneity (endogeneity) in transfers from children. • Both financial transfers from non-co-resident children and co-residence with children are modeled. • The populations of interest are: • Indonesia: Parents over the age of 60 who report having at least one living child over the age of 18. • Vietnam: Fathers (60+) and mothers (55+) with at least one non-co-residing child.

  4. Conclusions • Financial transfers appear to be more directed towards needier parents in Vietnam than in Indonesia. • However, neither financial transfers nor co-residence seem to be specifically targeted towards providing old-age support to elderly Indonesian or Vietnamese parents. • There is some evidence of crowding out of public transfers in Vietnam.

  5. Conclusions • Thus, little to suggest that the pressure for the elderly to continue to work to support themselves will decrease in the future. • Why do intergenerational transfers not result in elderly parents devoting fewer hours to the labor market? • Financial transfers may be too small or too unreliable to be used as a form of support; • There may be cultural or emotional motivations for continued work. • Co-residency seems to be an evolving form of HH structure rather than a means of support..

  6. More Research is Needed • Explicitly account for the joint nature of labor supply and alternative forms of intergenerational transfers. • Examines the interaction between public and family support. • Update these results for Indonesia and Vietnam and extend them to other contexts.

  7. References Cameron, L., Cobb-Clark, D. (2008) “Do Coresidency and Financial Transfers from the Children Reduce the Need for Elderly Parents to Work in Developing Countries?” Journal of Population Economics, Vol. 21(4), October, pp. 1007 – 1033. Nguyen, Trong-Ha (2008) “Monetary Transfers from Children and the Labour Supply of Elderly Parents: Theory and Evidence from Vietnam”, unpublished working paper, available Australian National University.

  8. Extra Slides

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