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Intergenerational resource allocation, elderly women's labour supply, and optimal policy

Ho Chan Foong, M.C.; (2010) Intergenerational resource allocation, elderly women's labour supply, and optimal policy. Doctoral thesis , UCL (University College London).

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In this thesis, we analyse how grandchild care needs affect elderly women's transfers and labour supply behaviour, and derive relevant policy implications. In the first chapter, we present background information on the intergenerational family with a particular focus on grandparent involvement in grandchild care in the United States. In the second chapter, we model intergenerational resource allocation within a general collective framework and estimate the impact of grandchild care needs on elderly women's time and money transfers, and labour supply behaviour. We find that grandchild care needs have important impacts on intergenerational transfers of time and money, but small net impacts on labour supply suggesting that elderly women adjust mainly leisure to meet child care needs. In the next chapter, we evaluate how the US 1996 PRWORA welfare-to-work reform which targeted low income young mothers, affected the related grandmothers via intergenerational transfers of time and money. Our results are consistent with an intergenerational family resource sharing network where higher child care subsidies motivate the family to shift away from grandmother provided child care to formal child care, and where elderly women increase money transfers to either help cover the remaining cost of formal care or to partly compensate for the loss in benefits of young welfare leavers. In the fourth chapter, we design an optimal disability insurance scheme taking into account the fact that elderly agents can engage in unobserved informal grandchild care activities. We show how a combination of lump sum transfers and child care subsidies can implement the constrained efficient allocation as though the government could observe informal child care. We then calibrate an overlapping generations model with child care needs to the US economy and estimate the cost savings from adopting the optimal policy. Finally, we conclude and discuss potential directions for future research.

Type: Thesis (Doctoral)
Title: Intergenerational resource allocation, elderly women's labour supply, and optimal policy
Language: English
Additional information: Permission for digitisation not received
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/20222
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