No free lunch, buddy: past housing transfers and informal care later in life

TitleNo free lunch, buddy: past housing transfers and informal care later in life
Publication TypeJournal Article
Year of Publication2018
AuthorsDeiana, C, Ciani, E
JournalReview of Economics of the Household

Previous empirical literature on the relation between intergenerational transfer of assets and services has mostly focused on contemporary exchanges. By contrast, we provide novel evidence showing that parents who helped their adult children in the past are rewarded by higher chances of receiving informal care later in life. To this end we use Italian data containing precise retrospective information about the help with housing that couples received from their parents when they got married, such as a real estate donation or down payment. Our estimates show that this type of past help is positively associated with the current provision of informal care to the parents. This result is robust to controlling for a large set of individual and family characteristics and is only partially due to increased geographical proximity. We suggest that this finding can be explained by mixed self-interest motives, related to theories based on either bilateral exchange or the presence of a third generation (grandchildren), such as the demonstration effect model or the family constitution model.

Keywordsgeographical proximity, Housing, Informal care, Intergenerational transfers