More Schooling, More Generous? Estimating the effect of education on intergenerational transfers

         
Author Name YIN Ting (Fellow, RIETI) / ZHANG Junchao (Institute of Statistical Mathematics)
Creation Date/NO. May 2017 17-E-074
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Abstract

This paper studies the causal effect of education on intergenerational transfers from/to adult children. Using micro-data from the China Health and Retirement Longitudinal Study, we exploit exogenous variations in parents' schooling induced by China's Great Famine to take account of the endogeneity of education, and then estimate the effect of schooling on the probability of receiving/giving transfers from/to adult children. The instrumental variable estimates show that an additional year of schooling has a negative effect on the probability of receiving transfers, but a positive effect on the probability of giving transfers at old age. Our results have some policy implications on social security in aging societies.