Abstract: Paper No. 4

Determinants and Consequences of Multi-Generational Living Arrangements: The Case of Parent-Adult Child Coresidence

Ulrike Schneider and Douglas A. Wolf

January 1997

Abstract:  Coresidence between adult children and their elderly parents has become less common over the past several decades. At the same time, the share of the population that is elderly has increased, and will continue to do so, which raises concern about the future living arrangements of the elderly. Several studies have investigated the determinants of choices of household arrangements, and how these choices affect the well-being of the parties that are involved in the decision process. This paper examines the consequences of moves by an elderly parent into, or out of, an adult child's household, with respect to the allocation of time between household and labor market activities, and on the rewards to time spent in paid labor. The empirical analysis is based on a subset of families observed over time in the Panel Study of Income Dynamics (PSID), in which the arrival or departure of an older parent took place. The families in this subset are used as their own controls--that is, we compare labor market and housework adjustments made over years of household change to adjustments made in years not accompanied by household change.

Our regression analysis reveals significant effects of a change in coresidence status on all the dependent variables examined: changes in the weeks spent in the labor market per year, in weekly working hours, in hourly earnings and in the weekly hours spent on housekeeping. We find that households' responses to an elderly parent's move in, and to a parent's move out, are asymmetrical. Also, heads and wives are affected differently by the shared living arrangements. Wives react almost exclusively to the move-out changes. Most strikingly, the ending of a period of coresidence substantially boosts wives' work out of the home. We also find that taking in an elderly parent increases the head's housework hours, but find no significant effect on wives housekeeping activities.

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