Marital Disruption, Step Children, and Transfers to the Elderly

1. Marital Disruption, Step Children, and Transfers to the Elderly Liliana Pezzin, Robert Pollak, and Barbara Schone

2. Goals of Our Paper • To explore the effects of marital disruption on late life child-to-parent transfers • Key outcome measures are intergenerational living arrangement and cash and time transfers • Focus on key effects of marital history, the child-parent relationship, and kin relationships • Analyze decisions from the child’s perspective

3. Background • Divorce Is an Important Part of Life • ≈ half of all marriages will end in divorce • 45% of children will experience by age 18 • 1/3 will live with stepparent • Other Changes in Family Structure • nonmarital childbirth and lower rates of marriage, remarriage, and blended families

4. Why Marital Disruption Matters • Divorce disrupts resources devoted to marriage-specific capital, and investments in children will likely be underprovided • Ties will be lessened between generations, especially for noncustodial parents • Transaction costs are higher across households • Remarriage creates more fluid family structures; family roles are less clearly specified

5. What We Know about Divorce • Most of the literature focuses on children • Much less on the long-term effects of divorce • Reduces family support and diminishes the quality of family relations • Stronger for fathers than mothers • Additional detrimental effects of remarriage

6. Why Should We Care about the Effects of Marital Disruption on the Elderly? • Intergenerational Transfers Represent Important Modes of Assistance • Coresidence • Informal Caregiving • Cash Transfers to a Lesser Extent • Adult Children’s Involvement Has Declined over Past Decades

7. Our Focus • Analyzing the effects of divorce, remarriage and stepchildren on children’s time and cash transfers and living arrangements • Unit of analysis is the network of adult children • To investigate the distribution of care within families • Effects of step children on the behavior of others • Focus on unpartnered elderly parents

8. Key Hypotheses • Divorce has a negative impact on transfers • Step children are less likely to provide transfers • The presence of step children reduces a child’s transfers (and there is a differential effect for biological children)

9. Data • Sample of unmarried parents from AHEAD (waves 1 and 2) • At least one ADL or IADL limitation and one child • Formed individual child records for each parent (N=4863 children of 1593 parents)

10. Dependent Variable Definitions • Living Arrangement Categorical variable: Index child lives with parent, Parent lives with other child, Parent lives with others, Parent lives in nursing home, Parent lives alone • Time Transfers =1 if child provided assistance with ADLs or IADLS in past 4 weeks; 0 otherwise • Cash Transfers =1 if child provides more than $500 to parent in past two years; 0 otherwise

11. Means of Dependent Variables • 10 percent of children provide cash transfers • 15 percent of children provide time transfers • Living Arrangement • 61 percent of children have parents who live alone; • 7 percent of children have parents who live in a nursing home; • 6 percent of children have parents who live with someone other than a child; • 8 percent of the index children have a parent who lives with them • 17 percent of children have a parent who lives with another child

12. Key Independent Variables • Family Type • Child level: biological/step child • Family network characteristics • Whether any child other than the index child is a step child (ANYSTEP) • Whether any child other than the index child is a biological child • Interaction of child level variable and ANYSTEP • Marital Status • Parent divorced • Parent ever remarried

13. Parent Characteristics Age Race Gender Child Characteristics Age Gender Education Education Economic Status Health Number of Children Number of Siblings Economic Status Marital Status Other Control Variables

14. Empirical Strategy • Estimate bivariate probit models for time and cash transfers • Estimate multinomial logit models for living arrangement • Stratify our models for only children vs. those with siblings • Correct standard errors for panel nature of data

15. Summary Information

16. More Summary Information

17. Children are less likely to provide care to (or to live with) a divorced parent Lower transfer levels by: step children children in blended families Only children provide more care but overall rates of care given to parents doesn’t vary by the number of children Key Points

18. Multivariate Results for Only Children

19. Multivariate Results for Multiple Children Families

20. Multiple Children • Negative effects of divorce on time transfers and coresidence • Negative effects of being a step child • Presence of biological children “crowds out” care provided by siblings for time • Similar effects for living arrangement

21. More Straightforward Information - Simulations

22. Interpretation of Family Type Effects • Small differences among step children by sibling network characteristics • High provision of time among bio children with only step children in the sibling network • could indicate that bio children are compensating for the expected lower care provision by step kids • Availability of other bio children affects living arrangements for bio kids

23. Other Effects • Strong ADL and IADL and age effects on time and living arrangement but not cash • Cash transfers influenced by economic status • Living arrangement affected by competing demands on the child’s time • Small positive correlation between giving time and cash

24. Summary • Results are supportive of the notion that marital disruption has a negative impact • Strong independent evidence that step children provide less assistance than biological children • Not much evidence that biological children in blended families provide less

25. Policy Implications • Results suggest that a growing number of elderly persons may be vulnerable due to weaker ties with their children • More pressure on formal care (and public dollars)? • Possibility that there will be unmet needs

26. Data limitations Timing of remarriage Remarriage following divorce or widowhood Role of Nonmarital Births Need for dynastic data Desire to understand the role of family type in understanding the motives for transfers Nature of Sibling Relations and Interactions Timing Issues of Transitions & the History of the Extended Family Needed Other Issues