Intergenerational exchange of time and money. Short-term reciprocity between parents and adult children

Thomas Leopold, University of Bamberg
Marcel Raab, University of Bamberg

Explanations to intergenerational support exchange become increasingly important as demographic ageing raises the prevalence and duration of parent’s old-age. How will intergenerational relationships develop under conditions of higher need, dependency and burden? Recent empirical work on intergenerational support has drawn on a long-term concept of reciprocity, which explains adult children’s help and care as repayments for earlier parental investments. We argue that reciprocal balancing of parent-child relationships is also achieved in the short term, especially if parents are highly dependent, receive intense support and have sufficient financial opportunities to reciprocate. Our empirical analysis with data from SHARE focuses on the short-term dimension of concurrent exchange in its main upward and downward currencies, time and money. We select a sample of single-living parents among whom help from children is particularly relevant. Fixed-effects conditional logit models reveal that within a family, parents direct financial transfers to those children, who support them with time transfers of help and care. Reciprocal patterns of support exchange emerge most clearly when the child’s time transfers are intense and the parent has high cash holdings. We conclude that short-term reciprocity is an important intergenerational arrangement that relieves intergenerational ambivalence in late parent-child relationships and eases the burden of ageing both for elderly parents and their adult children.