Private intergenerational contact in France and the demonstration effect

Abstract

This study analyses motives for intergenerational contact from adult children to their middle-aged parents. If these transfers may be explained either by altruism or by exchange, we mainly focus on the demonstration effect where households take care of their own parents in order to elicit a future support from their children. We test the model using a cross-sectional survey from 1992 about private transfers in France. According to the data, the presence of children increases the amount of visits that respondents provide to their parents and the econometric results still hold after controlling for unobserved familial heterogeneity using fixed effects. Although this empirical evidence is consistent with the demonstration effect, we suggest an alternative interpretation for the positive correlation based on the care of grandchildren.