UCLA

The chapters of this dissertation examine transfers between generations across three distinct contexts: a potential role for informal care in U.S. long-term care policy (Chapter 1), the effect of caregiving on bequests (Chapter 2), and making inferences about intra-household allocations using data on intergenerational transfers (Chapter 3).

The first chapter poses the question: how can government policy leverage family caregiving to make Medicaid financing of long-term care more sustainable without compromising the well-being of elderly beneficiaries and their families? This question is addressed using a partial equilibrium life-cycle model augmented with a repeated game played between an elderly parent and her adult child over long-term care and living arrangements. The results indicate that policies which either expand access to consumer-directed home care or provide direct financial compensation to caregivers can result in a substantial reduction in the use of institutional care, an increase in informal caregiving, and a decrease in government expenditures.

The second chapter is one of the first studies to examine bequest patterns and their determinants using data on actual bequests from a large and approximately representative, longitudinal survey of the U.S. population over age 50. The results indicate that caregiving from and co-residence with adult children are important predictors of the division of assets among children, with child caregivers receiving larger bequests than non-caregivers. The effects are strongest for bequests of housing assets. The salience of housing assets is further supported by evidence of a relationship between ownership of housing assets and the receipt of informal care from children near the end-of-life.

The third chapter utilizes a novel source of variation, intergenerational financial transfers from parents to children, to recover the intra-household allocation of resources (the "sharing rule") in a collective model of household behavior. The identifying assumption is that financial transfers from a household to, for instance, the wife's own children (the stepchildren of her husband) can be regarded as the private consumption (an "assignable" good) of the wife. The results indicate that married women receive roughly half of household resources and that an increase in a wife's wage increases her share of household income.