China & World Economy / 66–85, Vol. 27, No. 2, 2019

Motivation of Parent−Child Co-residence Behavior:
Evidence from the China Health and Retirement Longitudinal Study
Yijie Wang, Wenkai Sun, Xianghong Wang

Abstract

This paper examines the motivations of parent–child co-residence behavior in China using data from the China Health and Retirement Longitudinal Study. We test three possible motives: social norms, self-interest and altruism. We find that social norms play an important role in household co-residence behavior, showing that the belief that “sons take care of parents” is strong, and children in different birth orders take different responsibilities. Taking the one-child policy as a natural experiment, we compared co-residence behavior between only-child and multi-child families. This allowed us to test whether children in multi-child families with wealthier parents more often co-reside in order to compete for a bequest. We find that parents’ wealth is more appealing to children in multi-child families. The results support the life cycle theory that co-residence decisions are motivated by self-interest. We also find some evidence of altruism when parents and children make co-residence decisions. These findings provide some insights for designing future elder-support policies in China.

Key words: China, lifecycle, one-child policy, parent−child co-residence, social norm
JEL codes: I1, J1, R2