Abstract
Using data on 2,317 mother–daughter pairs from 10 European countries, we investigate the impact of downward time and monetary transfers on the career choices of transfer-receiving young mothers. For Europe as a whole, we find a strong positive effect of grandchild care on the labor force participation and the degree of labor market involvement of the young mother, but no impact of monetary transfers on either of these decisions. Both recipients and donors with better endowments are more likely to participate in a monetary transaction, while mothers with lower level of human capital are more likely to provide time transfers to their better endowed daughters.
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Notes
See for instance the special issue of the Journal of Labor Economics (1985).
We assume income pooling at the household level for both the parent and the child, meaning that we neglect complex bargaining issues between spouses for each generation.
The inability of providers of monetary as opposed to in-kind transfers to have full control over the choices made by the recipient makes the theoretical modelling of this possibility difficult (Pollak 1988). Furthermore, for the purposes of our empirical analysis, we have no information on the specific use a monetary transfer. We do however control for differences in the availability of formal care by including country variables in our regressions and hence explore the impact of both time and monetary transfers, conditional on exogenously given institutionalized childcare resources.
Interestingly, this standard first-order condition which links the parent’s and child’s marginal utility of consumption also holds in the basic altruistic model (Laferrère and Wolff 2006).
For further information and download of the data, see the following url http://www.share-project.org. The countries included in the first release of SHARE (2004) are Austria, Germany, Netherlands, Sweden, Spain, Italy, Denmark, France, Greece, and Switzerland.
While our data set does not provide a health variable for the daughter, we include a health variable of the mother in the transfer equations. The rationale for this is that health may be a larger determinant of economic outcomes for the mother, given her age, and may therefore be an important proxy for opportunity costs in her decision to provide transfers.
The mean of further education exceeds 0.75–0.80 in the case of monetary receipt whether simultaneously with a time transfer or without a time transfer, the mean of further education ranges around 0.60 among mothers not receiving monetary transfers. In addition, we find higher means of the current income variables among providers of monetary, as opposed to providers of time transfers.
A shortcoming of the data is that we have no information on the daughter’s location. For instance, there may be some differences in the supply of childcare services depending on whether the daughter lives in a rural or urban area.
We also exclude the monetary transfer variable from the regression, as there is no sufficient variability of that covariate at the family level to get robust findings.
The same pattern is expected if the daughter and her mother are in the same household. A decrease in the household income due to a bad shock will induce the daughter to work outside and will encourage the mother to take care of grandchildren according to the division of labor within the family.
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Responsible editor: James Albrecht
We thank two anonymous referees and the editor, James Albrecht, for their insightful comments and suggestions. We also thank Claudine Attias-Donfut, Sumon Bhaumik, Philip Cohen, Lionel Prouteau, André Masson, Judith Tress, and seminar participants at Brunel University, INSEE, Nantes University, the Annual Conference of the Population Association America at Los Angeles, the 23èmes Journées de Microéconomie Appliquée in Nantes, the Annual Conference of the European Society for Population Economics in Verona and the European Association of Labor Economists in Prague. Financial support from the RTN project on Grandparenting and Intergenerational Relations in Ageing European Societies is gratefully acknowledged. All remaining disclaimers apply.
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Dimova, R., Wolff, FC. Do downward private transfers enhance maternal labor supply? Evidence from around Europe. J Popul Econ 24, 911–933 (2011). https://doi.org/10.1007/s00148-010-0305-0
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DOI: https://doi.org/10.1007/s00148-010-0305-0