MPIDR Working Paper

Intergenerational transfers within the family and the role for old age survival

Kluge, F. A., Vogt, T. C.
MPIDR Working Paper WP-2020-021, 24 pages.
Rostock, Max Planck Institute for Demographic Research (May 2020)
Open Access


In this paper, we study the relationship between income and old age survival via the indirect pathway of private transfers. Our analysis focuses on intergenerational transfers in the family as an important, but so far less investigated, link between income and improved old age survival. We use an agent based model to simulate an exchange relationship between two generations in a family and incorporate realistic demographic, economic and time use data for Germany. We find that older parents transfer increasing shares of their pensions to their offspring and receive informal care or emotional support in return. This exchange motive is mutually beneficial as younger generations are in greater need for financial subsidies and older ones for contact and care. Our inductive approach adds to our understanding how income is spread in the family and how older family members can benefit from an exchange of money for care.

The Max Planck Institute for Demographic Research (MPIDR) in Rostock is one of the leading demographic research centers in the world. It's part of the Max Planck Society, the internationally renowned German research society.