TY - GEN
T1 - The effects of parental income on the living arrangements of single adult children in Japan
AU - Sakata, Kei
AU - McKenzie, Colin R.
PY - 2011
Y1 - 2011
N2 - The purpose of this paper is to test whether the 'bribe model' as an explanation for why adult children live with their parents is valid in Japan. The bribe model argues that while parents are happy to live with their young adult child, adult children do not wish to live with their parents. As a result, parents have to 'bribe' their children with financial or non-financial transfers to induce them to live with them. Using micro data from the National Family Research of Japan (Kazoku ni tsuiteno Zenkoku Chousa) 1998 and 2003, we examine the effect of parental income on the propensity of young adult children to live with their parents, and investigate how co-residency affects the life satisfaction of parents and child. There are two main challenges in estimating the effects of parental income on the propensity of children to live with their parents. First, there is a potential endogeneity problem between the likelihood of children to live with their parents and parental income. Second, data on parental income is not available for children who live on their own. In order to deal with these two potential problems, we use the two sample instrumental variable (TSIV) method. The findings suggest that parental income has a negative not statistically significant impact on the propensity to cohabit in Japan. While children seem to be indifferent toward co-residence with their parents, co-residence has negative impacts on the marriage satisfaction and sex life satisfaction of parents. Thus, for parents privacy is a normal good in Japan, and the bribe model is not applicable to the Japanese case.
AB - The purpose of this paper is to test whether the 'bribe model' as an explanation for why adult children live with their parents is valid in Japan. The bribe model argues that while parents are happy to live with their young adult child, adult children do not wish to live with their parents. As a result, parents have to 'bribe' their children with financial or non-financial transfers to induce them to live with them. Using micro data from the National Family Research of Japan (Kazoku ni tsuiteno Zenkoku Chousa) 1998 and 2003, we examine the effect of parental income on the propensity of young adult children to live with their parents, and investigate how co-residency affects the life satisfaction of parents and child. There are two main challenges in estimating the effects of parental income on the propensity of children to live with their parents. First, there is a potential endogeneity problem between the likelihood of children to live with their parents and parental income. Second, data on parental income is not available for children who live on their own. In order to deal with these two potential problems, we use the two sample instrumental variable (TSIV) method. The findings suggest that parental income has a negative not statistically significant impact on the propensity to cohabit in Japan. While children seem to be indifferent toward co-residence with their parents, co-residence has negative impacts on the marriage satisfaction and sex life satisfaction of parents. Thus, for parents privacy is a normal good in Japan, and the bribe model is not applicable to the Japanese case.
KW - Intra-household transfers
KW - Living arrangement
KW - Parental income
KW - Two sample instrumental variable (TSIV) method
UR - http://www.scopus.com/inward/record.url?scp=84858824771&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84858824771&partnerID=8YFLogxK
M3 - Conference contribution
AN - SCOPUS:84858824771
SN - 9780987214317
T3 - MODSIM 2011 - 19th International Congress on Modelling and Simulation - Sustaining Our Future: Understanding and Living with Uncertainty
SP - 1401
EP - 1407
BT - MODSIM 2011 - 19th International Congress on Modelling and Simulation - Sustaining Our Future
T2 - 19th International Congress on Modelling and Simulation - Sustaining Our Future: Understanding and Living with Uncertainty, MODSIM2011
Y2 - 12 December 2011 through 16 December 2011
ER -