Informal Care and the Division of End-of-Life Transfers

Transcription

1 Informal Care and the Division of End-of-Life Transfers Meta Brown University of Wisconsin-Madison March 2004 Preliminary Draft, Comments Welcome Abstract Unmarried parents with current informal care needs in the first wave of the AHEAD study derive the majority of their long-term care hours from their children, and child caregivers are generally unpaid. This study examines the extent to which the division of parents end-oflife transfers compensates caregiving children. In a model of siblings voluntary contribution of care to a shared parent, I demonstrate that parents of altruistic children can influence the total care they receive through the division of their estates, and that a selfish care-maximizing parent bequeaths preferentially to caregiving children. Estimates using data on AHEAD families reveal that children who are current or projected caregivers, and children whose siblings do not currently provide care and are not expected to provide care, are more likely to be named in their parents wills and life insurance policies. Among unequal dividers of bequests or life insurance, I find that parents bequeath an average of $12,000 more to children who currently provide care than to their non-caregiving siblings, and $21,000 more to expected caregivers. Finally, children with larger families of their own are allotted significantly smaller end-of-life transfers by parents with care needs. While this result is puzzling from the perspective of an altruistic or dynastic model of estate division, a theory in which end-of-life transfers are intended in part to elicit care from altruistic children may explain transfers that favor unmarried children with fewer dependents. JEL Classification: H41, I12, J14 The research completed herein was supported in part by the Center for Retirement Research at Boston College pursuant to a grant from the U.S. Social Security Administration funded as a part of the Retirement Research Consortium. The opinions and conclusions are solely those of the author and should not be construed as representing the opinions or policy of the Social Security Administration or any agency of the Federal Government, or the Center for Retirement Research at Boston College. I would like to thank James Andreoni, Robert Pollak, John Karl Scholz, Purvi Sevak, and seminar participants at the University of Wisconisin Center for Demography and Ecology and Actuarial Science, Risk Management, and Insurance workshops for valuable comments, and Misuzu Azuma for excellent research assistance. Correspondence: Department of Economics, University of Wisconsin, 1180 Observatory Dr., Madison, WI 53706; ph.: (608) ; mbrown@ssc.wisc.edu

2 1 Introduction Several researchers have documented the importance of family-based long-term care for the elderly in the U.S. 1 In data from the first wave of the Asset and Health Dynamics Among the Oldest Old (AHEAD) study, fielded in the U.S. in 1993, I find that 14 percent of all respondents and spouses receive regular care from their children, while only one percent pay a child for informal care. Among unmarried respondents with reported long-term care needs, 53 percent receive informal care from their children, and only 3 percent pay any child for care. Average monthly care hours supplied by caregiving children are substantially larger than those provided by other standard sources of non-institutional care, and the small group of children who are paid for their services enjoy wages that amount to less than a dollar per hour on average. 2 Further, McGarry and Schoeni (1997) demonstrate that financial transfers from living parents to their children measured in the AHEAD do not favor caregiving over non-caregiving children. Given the apparent absence of a family spot-market for care, this paper investigates the relationship between parents end-of-life transfer division choices and the informal care they derive from their children. Recent studies of families elder care arrangements indicate that children respond altruistically to parents care needs in the decision to provide long-term care. 3 The role of children s altruism is not neglected in the general models of family exchange of Bernheim, Shleifer, and Summers (1985), Cox (1987), and Cox and Rank (1992). However, the assumption that parents manipulate transfers in response to realized attention or help from their children, a fundamental component of such exchange models, may be unrealistic where families interact specifically over elder care. Sloan, Picone, and Hoerger (1997) find that the role of parents wealth in determining the care they receive from their children is no different for cognitively aware and cognitively unaware parents. Absent an extremely well-informed executor acting on the part of the cognitively unaware parent, this result suggests that parents are unable or unwilling to condition bequests on realized informal care from children. This paper presents a model of a group of altruistic siblings who make voluntary time contributions to a public good representing their parent s health. In turn, the parent determines each child s share in her estate. Rather than assuming that the parent manipulates bequests in response to realized care, the voluntary contributions framework requires only that the parent can commit in advance to a particular division of her estate. The model implies that a selfish parent seeking to maximize care hours commits positive bequests only to children whom she expects to be caregivers, in a lifetime sense. The model also implies that, all else equal, children whose siblings provide less 1 See, for example, McGarry (1998), Pezzin and Schone (1997, 2002) and the Task Force on Aging Research (1994). 2 Table 1 reports these and other measures of the sources and payment of long-term care in the weighted AHEAD wave 1 sample. Because married parents receiving ongoing care most often receive some care from their spouses, and because the wills of married parents less commonly benefit children where a survivng spouse is present, this paper focuses on care sources and transfer behavior among single, widowed, or divorced parents. Table 1 presents care and payment measures for the full AHEAD sample and for a restricted sample of 1381 unmarried parents with current care needs. See McGarry (1998) for a comprehensive treatment of the sources of long-term care reported by AHEAD respondents. 3 These include Pezzin and Schone (1999, 2002), Checkovich and Stern (2002), and Brown (2003). 1

3 care to a shared parent and children who have fewer own family obligations, including those to a spouse or dependent children, are more likely caregivers. Since care measures in the first wave of the AHEAD study are imperfect indicators of lifetime caregiver status, the model implications that parents bequeath only to expected lifetime caregivers and that the described set of child and family characteristics predict caregiver status are tested jointly using the AHEAD sample. Among children whose parents currently require care, determinants of lifetime caregiver status that I consider include the current caregiver status of the child and that of the child s siblings. Among children whose parents do not currently require care, determinants of lifetime caregiver status included in the estimation are the parent s prediction regarding whether the child and each of the child s siblings would provide any needed care in the future. Taking the probability of being a lifetime caregiver as the probability of belonging to the set of potential bequest recipients, I estimate the dependence of bequest receipt on predictors of the child s lifetime caregiver status. In correlated random effects probit specifications of the probability that a child is included in a parent s will and life insurance policies, I find that children of parents with current care needs are more likely to receive bequests and life insurance if they currently provide care and if their siblings do not provide care. Similarly, I find that children of parents without current care needs are more likely to be included in wills and life insurance policies if their parents predict that they will be caregivers and if their parents predict that their siblings will not be caregivers. Within-family estimates of the dependence of end-of-life transfers to siblings on siblings characteristics indicate that parents transfer more through bequests and life insurance to caregiving children. Parents in this sample intend to transfer an average of roughly $12,000 more to caregiving children than to their non-caregiving siblings. Further, parents who require care promise greater end-of-life transfers to children who are unmarried and have fewer children of their own, and children on whom they can provide more information. Parents without current care needs bequeath an average of $21,000 more to the children they identify as likely future helpers, and, where parents predictions of future caregivers are included in the estimation, children s family structures and the qualities of parent-child relationships are not significant predictors of children s bequest shares. The greater share of transfers to unmarried children who produce fewer grandchildren is puzzling from the perspective of an altruistic or dynastic model of estate division. However, a theory of parents estate division choices in which end-of-life transfers are intended in part to elicit care from altruistic children offers an explanation for transfers that favor children with fewer dependents. The existing literature on U.S. bequests demands that a project of this sort address two concerns. First, existing studies find that U.S. parents overwhelmingly choose to divide their estate equally among their children. Using administrative and U.S. Treasury data on estates large enough to have state or federal tax liabilities, Menchik (1980, 1988) and Wilhelm (1996) find that most estates are divided equally among testators children in the U.S. In each of these studies, the available data include information only on the children mentioned in a parent s will. Menchik (1980) reports that the children included in the wills of these relatively wealthy parents are generally all of the children who appear in the parents obituaries, and therefore that disinheritance is not a serious concern for 2

4 his results. However, in a representative sample of older parents drawn from the AHEAD study, I find that the intention to disinherit a child is not uncommon. Further, intended disinheritance and unequal estate division are more common among parents with current long-term care needs. Among unmarried AHEAD parents with positive bequeathable wealth, 2 or more children, and long-term care requirements, 28 percent intend to disinherit a child or divide their bequests unequally among their children. Parents who intend to divide their bequests unequally but include at least one child in their estates constitute 20 percent of the sample, and 15 of these 20 percent of parents intend to accomplish unequal division by disinheriting a child. Further, life insurance policies are most often divided unequally among children. I find that 63 percent of unmarried parents with care needs, multiple children, and term life insurance policies naming at least one child exclude some child from the set of policy beneficiaries. Overall, while the administrative data sources employed by Menchik and Wilhelm are extremely well suited to the analysis of the most consequential U.S. estates, a representative sample with explicit information on disinheritance appears to be of value where our concern is parents ability to defray children s costs of informal care through transfers. Second, Hurd (1987, 1989) and others have provided evidence that bequests are largely accidental, and that bequest motives explain little of observed saving or dissaving behavior. To the extent that the model provided here implies that parents value bequests, it might appear to be at odds with these findings. Using a standard life-cycle model, Dynan, Skinner, and Zeldes (2002) demonstrate that the addition of a substantial taste for bequests to preferences may contribute only a negligible amount to observed saving where parents are subject to longevity, medical expense, and earnings risk and have no access to annuity markets. The notion behind the bequest decisions of the parent in the model presented in this paper is that a parent with access only to severely restricted annuity markets, which appears to be the case for those 70 and older in the U.S., may hold assets with substantial value outside of her lifetime in the presence or absence of a bequest motive. 4 If such a parent can influence the informal care she receives from her family through her will and life insurance policies, then the bequest option may have an economically meaningful influence on the sources and quality of her long-term care. Following Dynan et al., this relationship need not imply that the parent s bequest option exerts a significant influence on her saving decisions, which are likely to be driven largely by her high marginal utility of consumption in unlikely survival states. Section 2 presents a model of children s voluntary contributions of care hours to a shared parent, and the parent s care-maximizing estate division. In Section 3, the AHEAD sample used in the estimation, the existing evidence on the manners in which parents divide transfers among their children, and the empirical importance of disinheritance are discussed. Section 4 reports empirical results on the dependence of parents estate division choices on children s caregiving activities, and the differences and similarities between the transfer division behavior of parents with and without care needs. This is followed by a section of concluding comments. 4 See, for example, McCarthy and Mitchell (2002). 3

5 2 A Model of Estate Division and Children s Contributions of Time to a Parent s Care The motivations for transfers between parents and children have been the grounds of an extended debate in the economic literature. The implications of models of altruistic bequests and cash transfers from parents to children have been tested and rejected by Wilhelm (1996) and Altonji, Hayashi and Kotlikoff (1997). 5 On the other hand, results from the estimation of the behavioral models of families care arrangements in Pezzin and Schone (1999), Engers and Stern (2002), and Brown (2003) indicate that children respond altruistically to parents care needs in deciding to provide informal elder care. Of particular relevance to this study, several researchers have examined the hypothesis that parents make inter-vivos transfers or bequests to their children in exchange for services such as attention or long-term care. 6 One factor that models of exchange have in common is that the parent must be able to condition her bequest or gift on the receipt of services from the child. Sloan, Picone and Hoerger (1997) construct an empirical test of the exchange of bequests for care from children based on the notion that a parent who has experienced some cognitive impairment as a part of aging is likely to be unable to condition bequests on care provided by her children. They find that the role of the parent s wealth in determining care from the child is no different for cognitively unaware and aware parents, and conclude that an exchange motive cannot explain the observed care provided by children. Further, the notion that parents write and rewrite wills and life insurance contracts in response to care provided by children may conflict with the reader s intuition or experience. This section presents a simple model of the estate division problem of a selfish parent with current care needs and altruistic children. The parent holds an exogenously determined stock of bequeathable assets and can commit to any preferred division of end-of-life transfers among her children as long as all bequeathable assets go to some child. 7 I also assume that the parent cannot credibly condition the bequest shares she promises to her children on their realized caregiving behavior, since she may die unexpectedly or lose the ability to manipulate her assets as a part of the aging process. However, as long as the parent can credibly commit to transfer unconditional shares of her bequeathable assets to a subset of children, she may influence her children s actions through the division of her estate. 8 The model developed below addresses both the voluntary time 5 However, Horioka (2001) and Light and McGarry (2002) find some evidence of altruistic bequest motives for subsets of U.S. families using survey data that include self-reported transfer motives. 6 These include Bernheim, Schleifer, and Summers (1985), Cox (1987), and Cox and Rank (1992). McGarry and Schoeni (1995) and Hochguertel and Ohlsson (2000) report findings that are inconsistent with the implications of exchange as presented in Cox and Rank (1992). 7 I assume that the bequest dollars are of no value to the parent outside of their ability to influence childrens care decisions. This assumption is motivated by the observed limitations in the private insurance markets and is discussed below. 8 The parent s committment to a bequest division may take place through irrevocable trusts, transfers of homeownership that commonly precede the death of the parent, or any will or other arrangment the parent can credibly commit not to reverse during her life. 4

6 contributions of a group of siblings to the care of their elderly parent, and the influence of the parent s estate division choices on the total care provided. In this sense, it is an application of the Bergstrom, Blume, and Varian (1986) model of private contributions to a public good to the case of siblings decisions to care for a parent. The analysis draws on results in both Bergstrom et al. and Andreoni (1988). The parent has J children, indexed j = 1,..., J. Child j values a private consumption good x j, consumed by the child and her own family. From this point, references to the child s own family indicate the spouse and children of the child, or the son- or daughter-in-law and grandchildren of the parent making the estate division choice. Additionally, each child values care provided to the parent, C, and so C functions as a public good. Total hours of care are the sum of care hours contributed voluntarily by each child, so that J C = c j, j=1 where c j 0 is the number of hours of care contributed to the parent by child j. 9 Children s preferences are defined over the private and public goods, with child j s utility represented by the continuous and strictly quasi-concave function U j = u j (x j, C) j. I assume that u j is strictly increasing in both of its arguments, and that the child s marginal utility of consumption x j grows arbitrarily large as x j approaches zero. Under this specification, children s contributions of care to a shared parent may vary due to differences in children s wages, relative concern for the parent s welfare, or some combination of these factors. 10 Each child is endowed with T waking hours to be expended in market work at wage w j, time with her own family, and care for the parent. She and her family enjoy income N j that is independent of her labor supply. The child s own family demands a total of γ j hours (or w j γ j dollars) of support, which represents the combination of time and market inputs required to meet the family s needs Checkovich and Stern (2002) find that the time contributed to the care of a parent by one child depends negatively on the time contributed by her siblings, suggesting both that children function as substitutes in the production of parental health and that children do not compete through care hours for parental transfers. Based on the findings of Checkovich and Stern, in the the specification presented here I assume that children are perfect substitutes in the production of parental health. The assumption that all child hours are equally productive is a useful simplification, but is not needed for the finding that the parent bequeaths preferentially to caregivers. 10 Bergstrom et al. and Andreoni provide results in the model of private contributions to the public good for the cases of homogeneous and heterogeneous preferences. In these studies, the set of contributors under homogeneous preferences consists of the members of society with the greatest endowments, while in the case of heterogeneous preferences the set of contributors consists of the wealthiest and the most generous members of society. In my application of the voluntary contributions model to the case of a family caring for a parent, under homogeneous preferences the set of contributors would consist of those with the greatest endowments, to be described below, and lowest wages. With the heterogeneous preferences depicted above, the set of contributors depends on a more complicated criterion based on endowment, wage, and generosity. 11 This γ j family need is roughly analogous to the financial need of the child as a function of the child s family commitments perceived by the parent making an estate division choice in Wilhelm (1996). 5

7 This assumption influences the predictions of the model in that the presence of family commitments increases the value of the marginal hour to the child in the production of x j and C. More general specifications of the time demands of a child s spouse and own children might be expected to produce the same implication for the value of the child s time in the presence and absence of own family obligations without adding much to the predictions of the model for the interaction of the child and parent. Where h j represents child j s labor supply, the child s time constraint is h j T γ j c j. Her financial constraint is x j w j h j + N j + b j, where b j 0 represents the anticipated bequest from the parent. Note the absence of the restriction that h j 0. In specifying the child s time choices, I permit the child to hire care for the parent at wage w j. 12 Finally, the parent is assumed to hold an exogenously accumulated stock of bequeathable wealth, which has an expected present value to her children of B. This stock of bequeathable wealth may consist of non-annuitized liquid assets that have value while the parent is alive and in the event of her death, or may be accumulated term or whole life insurance, at least part of which has value only in the event of the parent s death. The important characteristics of B include that it is exogenously set at the start of the current (and only) period and that the parent may commit today to any division of B among her children. As a result, her children take their promised shares of B as fixed non-labor income to be realized. The parent transfers bequest b j 0 to each of her children, subject to asset constraint B = J b j. j=1 Since the parent s ability to commit to her division of B is complete, I abstract from the dynamic aspect of the care receipt and bequest transfer. The children simply make their care and work hours decisions taking b j as realized non-labor income I base this assumption on the notion that there are monitoring costs associated with the use of formal care, and that these costs lead to a strong positive association between the child s wage and the net cost of formal care. This 1 permits children to trade off care hours for market goods at a rate of w j even where c j T γ j. Empirical evidence that children rarely hire formal caregivers for their parents, despite the fact that child wages often exceed formal caregiver wages, can be found in Engers and Stern (2002) and McGrarry (1998). I find that 24 of the 8222 wave 1 AHEAD respondents report that a child assists them with the payment of a caregiver. Under the stated caregiver wage assumption, a child employs formal care only in the rare event that her non-labor income is great enough to meet her family s needs and to provide x j such that u j C C=C j +T γ j > u j x j. 13 This model structure abstracts from all capital (but not insurance) market limitations, along with other dynamics. The assumption that parents can commit to a particular estate division may be more plausible than the assumption that each child can borrow against promised bequests if she prefers. However, if some component of children s motivation for earning is the need to save, for example to fund retirement or their own children s educations, then an anticipated bequest from the parent may realistically permit the child to meet her own family s requirements with fewer hours of work. 6

8 With the above assumptions, the problem of child j can be written max x j,c j u j (x j, C j + c j ) (1) s.t. w j (T γ j ) + N j + b j x j + w j c j, 0 c j, where C j represents the total time contributions of child j s siblings to the parent s care. As in the private contributions models of Bergstrom et al. and Andreoni, the child s problem can be rewritten as one in which the child determines both the amount of the private good she consumes and the total contribution to the public good, subject to the non-negativity constraint on contributed care hours. Thus the child s problem in (1) is equivalent to max u j(x j, C) (2) x j,c s.t. w j (T γ j ) + N j + b j + w j C j x j + w j C; C C j. Solving the child s problem produces the continuous demand function for care hours C = max{f j (T γ j + N j + b j w j + C j ; w j ), C j }, j = 1,..., J. The argument in f j represents the full time endowment of child j plus the care hours of contributing siblings as valued by child j. If the inequality constraint on child j s contributed hours is not binding, then she chooses to be a caregiver. Her choice of total care hours supplied to the parent is C = f j (T γ j + N j+b j w j +C j ; w j ), of which her contribution is c j = f j (T γ j + N j+b j w j +C j ; w j ) C j. Demand as a function of the total endowment, f j (.), is increasing and varies across siblings in response to both market wage and relative concern for the parent s well-being. The demand function f(.) is assumed to be differentiable. In addition, I assume that both the public and the private goods are normal for each child, so that 0 < f (.) < Given the assumptions on children s utilities and their implied demand for care hours supplied to the parent outlined above, it can be shown that (i) there exists a unique Nash equilibrium to the voluntary care contributions game and (ii) any change in the distribution of endowments among the J agents that increases the aggregate time endowment of current contributors necessarily increases the equilibrium supply of care to the parent. With the adaptation of the argument in f j to reflect child j s time endowment, the proofs of points (i) and (ii) follow Bergstrom et al. directly. They are therefore omitted in the interest of preserving space. Given (i) and (ii), I demonstrate that transfers from non-contributing to contributing children increase the total care supplied. 14 These assumptions adapt the assumptions on the form of the demand for the public good in Bergstrom et al. and Andreoni to the case of time contributions. 7

9 Proposition 1 Any transfer from a non-contributing child to a contributing child increases the equilibrium supply of the public good. Proof. A transfer of ε dollars from non-contributor i to contributor j increases the endowment of j by ε and decreases the endowment of i by ε. Since the endowments of siblings other than i and j are unchanged by the redistribution, the aggregate time endowment of pre-transfer contributors is increased by ε w j, and, by result (ii), the equilibrium supply of care to the parent must increase. Here we turn to the parent s problem. Consider a selfish parent with utility of total care u P ( j c j), and u P (.) > 0. The parent chooses bequest division {b j } J j=1 to maximize up ( j c j), subject to B = j b j and b j 0 j. These assumptions, along with proposition 1, lead to the following result for the parent s estate division choice. Proposition 2 As long as c i = max{f i (T γ i + N i+b w i ; w i ), 0} > 0 for some i {1,..., J}, the selfish parent chooses b j > 0 only if c j > 0. The parent commits positive bequests only to children who contribute to her care. Proof. Suppose not. Suppose that c i = max{f i (T γ i + N i+b w i ; w i ), 0} > 0 for some i {1,..., J} and the parent allocates bequests {b j } J j=1 such that B = j b j and b k > 0 for k i such that c k = 0. Either (a) some child l {1,..., J} chooses c l = f l (T γ l + N l+b l w l allocation {b j } J j=1, or (b) The equilibrium is such that c j = max{f j (T γ j + N j+b j w j initial bequest allocation {b j } J j=1. + C l ; w l ) C l > 0 at initial bequest + C j ; w j ) C j, 0} = 0 j at In case (a), the parent would prefer to reallocate bequest dollars b k to child l and increase total care received j c j, as implied by proposition 1. In case (b), the parent would prefer to reallocate bequest dollars j i b j to child i and enjoy a positive amount of care from her children. Therefore the parent will never bequeath a positive amount to a child who provides no care as long as c i = max{f i (T γ i + N i+b w i ; w i ), 0} > 0 for some i. The model described in this section demonstrates that when children are sufficiently altruistic toward their parents, even a parent with no ability to condition the bequests she offers her children on their realized provision of care can influence the amount of care supplied by her family through the division of her estate. Further, the model describes the association between care hours supplied to a disabled elderly parent and expected bequests, replacing the standard selfish exchange motives for children with the perhaps more plausible assumption that children derive utility from helping their elderly parents, but must balance the needs of parents against those of their own families. One implication of the model to be tested below is that caregiving children should be the beneficiaries of elderly parents wills and insurance contracts in families in which elder care takes 8

10 place. Another, to be tested in conjunction with the bequest result, is that children with more own-family commitments are less likely to be caregivers in a lifetime sense. The above theory assumes that the parent holds bequeathable wealth B, and that B has value to the parent only as it influences her children s care decisions. Private annuity markets are known to be limited for retirees, and a majority of parents, even in the sample of those 70 and above with chronic health problems and no surviving spouses, have life insurance of some sort. If these are long-held term or whole life insurance policies, then a large portion of their value will be available only at the death of the parent. Claims to the settlements from such policies are presumably traded at unfavorable rates for the representative policy owner. As a result of insurance market limitations and existing longevity risk, a selfish parent may hold assets with substantial value to her heirs and may have limited ability to exchange these assets for consumption while she is alive. Altruism and private information in family relationships may thus allow the parent to exploit components of her wealth not available for consumption in order to extract care from her children. In the above analysis, the interactions of parents and children are limited to bequests from parent to child and time transfers from child to parent. One might expect parents to pay children directly for their assistance if this option were available to them. However, the findings in McGarry and Schoeni (1997) and in table 1 of this paper provide little evidence of a spot market for care. Further, as long as insurance market limitations lead some portion of the parent s wealth to have value only to her heirs, the inclusion of a spot market for care does not reverse the finding that the parent bequeaths preferentially to caregiving children. A second mode of interaction denied families in this model is that of transfer payments among siblings. 15 Though children with high wages might be expected to make transfers to their lower-earning siblings in exchange for the siblings contributions of care to the parent, even with small costs of coordinating this transaction such side payments would not change the implication that parents transfer to children in the caregiving set. 3 Data This section presents descriptive findings on the bequests and life insurance older parents intend to leave their children, and details the construction of the variables and sample of families used in the estimation of models of estate division reported in the next section. The data are drawn from the Asset and Health Dynamics Among the Oldest Old (AHEAD) study of U.S. residents born in or before 1923 and living outside of institutions in All findings are based on wave 1 of the survey, and the weighted sample proportions reported are representative of the population of non-institutionalized U.S. residents aged nearly 70 and above in Engers and Stern (2002), for example, model families decisions regarding who cares for a disabled parent and permit side payments from non-caregiving to caregiving siblings. 9

11 3.1 Intended Life Insurance and Estate Division The most detailed data employed in existing studies of estate division are drawn from probate records, as in Menchik (1980, 1988), or estate tax returns, as in Wilhelm (1996). These data sources include testators whose estates are large enough to be subject to state or federal estate taxes, and therefore they represent wealthy subsets of testators. Though such a data set may be ideal where the objective is an understanding of the allocation of the most consequential U.S. estates, for the present purposes a representative sample of benefactors would be preferable. An additional limitation is the exclusion from these data of children not mentioned in their parents wills. For this reason, probate and tax return data may omit some information on parents decisions to disinherit children. Addressing the consequences of the exclusion of disinherited children for their results, Wilhelm (1996) and Menchik (1980, 1988) rely on Menchik s (1980) finding, for a subset of families in his data on wills probated in Connecticut between 1931 and 1946, that the number of children mentioned in the obituaries of the decedents almost always matches the number of children included in their estates. 16 The evidence on intended disinheritance is quite different for the AHEAD sample, however. Table 2 reports that 77 to 78 percent of all single, widowed, or divorced parents with multiple children and wills in the AHEAD study, and 71 to 72 percent of unmarried parents with care needs, wills, and multiple children, intend to divide their bequests about equally among their children. This table also details the various modes of estate division intended by unmarried AHEAD parents. While 11 percent of parents intend to disinherit some child but include another child in their wills, and 6 percent disinherit all of their children, only 5 percent provide unequally for their children while including all of their children in their wills. The rates reported in table 2 also suggest that disinheritance is particularly common among elderly parents with long-term care needs. Parents with long-term care needs are more likely than currently independent parents to intend to divide their bequests unevenly with all of their children included in their wills and to disinherit any or all of their children. The share of parents without care needs who claim to be equal dividers is 10 percentage points higher than the share of parents with care needs making the same claim. Three quarters of the 20 percent of parents with care needs who intend to divide their estates unevenly disinherit a child or children in order to do so. Eight percent of parents with care needs and wills disinherit all of their children. Overall, parents with current care needs are more likely to intend unequal division, disinheritance, or both, and disinheritance appears to be the preferred mode of unequal estate division among unequal dividers. In addition, few studies of realized or intended estate division include life insurance in the set 16 With the intention of studying the role of the division of the most consequential estates in the U.S. in the accumulation of capital and the intergenerational transmission of wealth, Menchik and Wilhelm base their studies on administrative and U.S. Treasury data on estates large enough to have tax liabilities. Where the intergenerational correlation in earning ability is imperfect, a model of an altruistic parent s estate division choices, such as that employed by Wilhelm, indicates that a wealthy parent is relatively unlikely to disinherit her children. For this reason, the omission of disinherited children is arguably less of a concern in a study of the division of very large estates. In addition, professional estate planners may advise testators to mention even disinherited children in wills in order to decrease the likelihood that disinheritance will be contested. 10

12 of end-of-life transfers considered. While most researchers conclude that equal division of bequests is the norm in the U.S., life insurance is more often divided unevenly among children. 17 I find that 63 percent of unmarried parents with care needs, multiple children, and term life insurance policies naming at least one child exclude some child from their insurance policies. In the estimation in section 4, term and whole life insurance policies are included with bequests in the end-of-life transfers parents divide among their children Sample Construction and Descriptive Statistics As a first investigation of the relationship between intended bequests and family care, I consider the rates at which children included in and excluded from their parents wills care for their parents. I define a child as a caregiver if the parent claims that the child regularly provides her with assistance in the activities of daily living (ADLs), which include crossing a room, bathing, dressing, using the toilet, feeding oneself and getting in and out of bed, or instrumental activities of daily living (IADLs), including managing medications, shopping, preparing a hot meal, managing finances and using the telephone. The long-term care needs of married individuals are most often met by their spouses, and so we might expect single, widowed or divorced respondents to be at greater risk of going without needed care and to rely most heavily on children and non-family sources of assistance. 19 For these reasons, we will consider the association between bequests and care in the families of unmarried parents who report ongoing care needs in wave 1. The question is most easily addressed in the case of only-child families. Among only children whose parents have current care needs, 33 percent of children not named in wills provide informal care for their parents; 45 percent of children named in parents wills provide informal care. The estate division choice in larger families requires more detailed analysis. As a first step, we consider the frequencies with which children in multiple-child families who are included in or excluded from their parents wills provide informal care for their parents. I find that 18 percent of children whose parents have current care needs and who are included in their parents wills while at least one sibling is excluded provide care. Twelve percent of children who are included in their parents wills with all of their siblings, and 6 percent of children who are excluded from their parents wills while some 17 Wilhelm (1996) finds that 68.6 percent of parents subject to the estate tax divide their bequests exactly equally among the children included in their wills, and 76.6 percent divide their bequests approximately equally (within 2 percent of the value of the transfer) among included children. Menchik (1980) finds 62.5 percent equal dividers, and Menchik (1988) 84.3 percent. Light and McGarry (2002) find that 92.1 percent of the mothers in their sample intend to divide their estates equally. 18 In using the data on living parents estate division plans discussed in this section, I rely on parents ability to report the content of their existing wills and life insurance policies accurately. This reliance on survey data on individuals asset holdings is not uncommon in economics, particularly in the literature on retirement and aging. Hurd and Smith (2002) and Levine (2003) find that Health and Retirement Study (HRS) respondents subjective bequest expectations are meaningful predictors of realized bequest amounts. Though I use survey data on existing assets and not subjective expectations in the estimation in this paper, the finding that respondents expectations regarding their bequests are informative may increase confidence in respondents reports on the contents of their wills and life insurance policies. 19 McGarry (1998) finds that 67.2 percent of the helpers of married individuals in the first wave of the AHEAD are the individuals spouses. 11

13 sibling is included, provide informal care for their parents. These unconditional cross-tabulations of parents intended bequests and children s caregiving behavior reveal a strong positive association between end-of-life transfers and current care. However, heterogeneity in parents and children s observable characteristics, and in unobservable characteristics of families, may play an important role in determining the association between observed bequests and care arrangements. Further, cross-sectional measures of children s caregiving activities may be imperfect measures of lifetime caregiving. For these reasons, I estimate several empirical models of estate division in older families in which parents do and do not require current care, with results reported in the following section. The set of parents used to study estate division consists of the subset of members of the full sample who are single, widowed, or divorced and have two or more living children identified in the AHEAD data. A further requirement imposed on the sample is that each parent have a will or term or whole life insurance policy naming at least one child, or positive reported net worth and no will. 20 Descriptive statistics for the variables employed in the estimation in section 4 are reported in table 3, and are obtained separately for families in which parents do and do not have current care needs. The characteristics of the families of parents with and without current care needs are roughly comparable, with a few exceptions. Children of parents with current care needs are included in their parents wills 81 percent of the time, as compared with 91 percent for children of parents without current care needs. This reflects the differences in the two samples in the rate of disinheritance of some or all children and the amount of parental wealth. Children of parents who require care are slightly older (51 versus 47 at the median) and have lower incomes than children of parents who remain independent. The median amount of schooling in each sample is the same, however, at 12 years. I find that parents with care requirements are older, and their total bequeathable wealth is smaller on average. The structures of children s own families in the two samples are similar, though children of disabled parents are less likely to be married and have more children of their own than children of non-disabled parents. Thirteen percent of the children of sample parents with care needs act as caregivers, where caregiver status is defined as above. Though parents without current care needs clearly have little care to report, another appealing feature of the AHEAD data for the investigation of long-term care sources is that parents not currently requiring help are asked who would assist them on a regular basis should they eventually need assistance. Table 3 reports the mean for the child-level sample of an indicator for whether the parent thinks each child will provide long-term care should she require it. Ten percent of sample children whose parents do not currently require care are expected to make time transfers to their parents if needed in the future. Interestingly, predicted and actual caregiving rates are fairly consistent. The predictions of the model deal exclusively with the parent s discrete decision whether to include each child in her bequest, and therefore much of the estimation emphasizes children s 20 Parents with positive bequeathable wealth and no wills are de facto equal dividers, in that estates are divided equally among the children of an unmarried decedent without a will in most states. 12

14 inclusion in their parents wills and life insurance policies. However, a measure of the effect of elder care on a child s net transfer may be valuable as one indication of how influential end-of-life transfers are likely to be in eliciting family care and how successfully they may compensate children for the large time transfer children make to their elderly parents. In order to estimate the change in the amount of end-of-life transfers associated with being a caregiver, we need information on the transfers sample parents intend to make to each of their children. The AHEAD study reports which children are included in parents wills but not how parents estates are to be divided among their included children. For this reason, I calculate potential end-of-life transfers for each child included in the parent s will as the amount of life insurance held in the child s name plus the parent s net worth including housing divided by the number of children included in the parent s will. For each child excluded from the parent s will, potential end-of-life transfers are calculated as the amount of life insurance held in the child s name. These approximations of the potential end-of-life transfers to each child account for differences in reported life insurance benefits and the effect of parents decisions to disinherit any or all of their children. However, they overlook the unequal division of bequests among the 3.9 to 4.6 percent of parents without care needs and wills who provide unequally for their children in their wills, as well as the 5.5 to 7.3 percent of parents with care needs and wills who provide unequally for their children in their wills. Additionally, if any of the parents with wills who disinherit some child but not all children divide their bequests unequally among the children remaining in their wills, then the approximated potential end-of-life transfers account only for the disinheritance and not for the variation in bequests among included children. 21 The distribution of potential transfers is highly skewed in each sample, with a mean of $23,739 and a median of $5943 in the sample in which parents require care, and a mean and median of $43,355 and $17,433 for families in which parents do not require care. This effect is a product both of the distribution of parental wealth in the sample and of the practice of disinheritance. 4 End-of-Life Transfer Division Estimates Table 4 presents estimates from correlated random effects probit specifications of the probabilities that children of parents with and without current care needs are included in their parents bequests and life insurance policies. The bequest estimation samples are restricted to families in which parents have wills that name at least one child or no wills but positive net worth. The life insurance samples include only families in which parents have term or whole life insurance policies naming at least one child. I employ the Chamberlain (1980) random effects probit specification. Following 21 Table 2 shows that 14.6 percent of parents in the care sample with wills disinherit some child, while 5.5 percent include all of their children in their wills and yet divide their estates unequally among their children. For the latter 5.5 percent of families, the assumption of equal division among included children is certainly in error. For parents who disinherit some child, equal division among the remaining children may or may not be inaccurate. Probit estimates of the probability of children s inclusion in parents wills and life insurance policies reported in table 4 do not suffer from this data limitation. 13

15 Mundlak (1978), I assume that family effect v i is such that v i z ij Normal(ψ + z i ξ, σ a ), where z i is the family mean of observable family i, child j characteristics z ij and σ a is the variance of a i in the expression v i = ψ +z i ξ +a i. This specification accounts for unobservable components of the parent s decision to establish bequests or insurance policies for her children, and also permits us to test whether siblings characteristics and caregiving activities influence the probability that a child receives an end-of-life transfer from her parent. 4.1 Transfers and Caregiving The estimates in table 4 indicate that a child is more likely to be included in the will or life insurance policy of a parent with current care needs if the child herself cares for the parent and if the child s siblings do not care for the parent. The coefficient on the child s caregiver status indicator in the bequest regression for families in which parents require care is positive and significantly different from zero at the five percent level. The coefficient on the caregiver indicator in the life insurance regression for families whose parents require care is positive and significant at the one percent level. The coefficient on the family mean child caregiver status is negative and significant at the five percent level in the bequest regression, and the coefficient on the family mean child caregiver status in the life insurance regression is negative but does not differ significantly from zero. The average partial effect of being a current caregiver on the probability of being included in a parent s will is 2.36 percent; the effect on the probability of being named in a life insurance policy is percent. Similarly, a child whose parent does not currently require care is more likely to be included in a parent s will or life insurance policy if the parent expects her to provide care in the future and if the parent does not expect the child s siblings to be future caregivers. The coefficient on the child s predicted caregiver status in the bequest regression for families whose parents do not require care is positive and significantly different from zero at the one percent level, as is the analogous coefficient in the life insurance regression. The coefficient on the family s average predicted child caregiver status in the bequest regression is negative and significantly different from zero at the ten percent level; in the life insurance regression, it is negative and differs significantly from zero at the five percent level. The average partial effect of being a predicted caregiver on the probability of being included in a parent s will is 2.39 percent; the effect of being a predicted caregiver on the probability of being named in a life insurance policy is percent. 22 The difference in the magnitudes of the average partial effects of being a current or expected caregiver in the bequest and life insurance models stems from the difference between the rates at which children are included in their parents bequests and life insurance policies. A high proportion 22 Average partial effects are estimated at the sample child characteristic means using individual family means to integrate out the family effect. 14

16 of sample children are included in their parents bequests (91 percent of children in the care needs sample and 95 percent of children in the no care needs sample), and a more moderate proportion of sample children are included in their parents life insurance policies (56 percent of children in the care needs sample and 65 percent in the no care needs sample). In each table 4 specification, the null hypotheses that the family effect is zero and that the family effect is uncorrelated with observable sibling characteristics are easily rejected. This is not surprising for the case of bequests, given the frequency with which sample parents include all of their children in their estates. Overall, the estimates demonstrate that caregivers and predicted caregivers are more likely to receive end-of-life transfers and that children whose siblings are caregivers or predicted caregivers are less likely to receive end-of-life transfers. They therefore support the model implications, taken jointly, that children whose siblings provide care are less likely to be caregivers and that parents bequeath preferentially to children in the set of lifetime caregivers. 23 As discussed in section 3, the magnitude of the difference in end-of-life transfers received by caregiving and non-caregiving siblings is of interest as a measure of the extent to which bequests compensate children for the large transfers of time they make to their elderly parents and an indication of how likely care-motivated end-of-life transfers are to exert meaningful influence on the elder care supplied by families. In order to determine the difference in transfer dollars designated for caregiving and non-caregiving children of the same parent, I estimate a fixed effects specification of the division of intended bequests and life insurance. This approach requires that the sample be narrowed to families in which parents have wills or life insurance policies that treat their children differently. Recall that while at least 71 percent of unmarried parents with wills and care needs divide their estates about equally among their children, 63 percent of unmarried parents with life insurance policies include some child and exclude another. In total, 260 unmarried parents with ongoing care needs, with a combined total of 1055 children, report demographic information on two or more children and divide their end-of-life transfers unevenly. In addition, 266 unmarried parents with multiple children and no current care needs, who combined have 999 children, meet the data requirements and divide end-of-life transfers unequally among their children. I use data on these two family groups to estimate fixed effect models of the estate division choices of parents with and without care requirements McGarry (1998) demonstrates, in pooled data on the children of married and unmarried AHEAD parents with and without current care needs, that the probability that a child is a caregiver depends positively on whether the child is included in a life insurance policy or deed to the parent s house, but not on whether the child is included in the parent s will and negatively on the parent s bequeathable wealth. I find similar results for the effects of inclusion in wills and life insurance using pooled AHEAD data on all children. The evident difference between the findings I report in this paper and those of McGarry stems from the difference in the questions we pose. McGarry examines the behavior of the children of a representative sample of older parents who have the care requirements and spousal assistance of a representative sample of older parents. I am interested in the care and transfer arrangements of the subset of older parents who have achieved a relatively dependent life state, and in the intentions and predictions of currently independent parents who risk realizing that dependent state. Additionally, based on the theory presented in section 2, I am interested in accounting for various family effects in my estimation of the relationships among children s current and predicted caregiving and the transfer decisions of their unmarried parents. 24 There is a concern here that parents select themselves into the set of unequal dividers based on the same factors 15

17 Table 5 reports the results of several fixed effects specifications of the dependence of end-of-life transfers from parents to children on children s characteristics and actions. Children who provide care receive an expected increase in end-of-life transfers of $11,639 relative to their non-caregiving siblings, and the coefficient on the care indicator is highly significant in each specification. When the measure of care provided is weekly hours of care, the estimates indicate a $143 increase in endof-life transfers to children for each hour. 25 Though the estimated coefficient on weekly care hours is positive in both specifications in which it is included, it differs significantly from zero at the ten percent level in only one of the specifications. Further, given the life expectancies of the parents in the sample it implies a low hourly wage for long-term care if children s caregiving activities are to be continued through the ends of their parents lives. For example, the average hourly transfer wage to caregiving if all parents die in exactly one year would be $2.75. The low effective care wage challenges pure exchange explanations for the observed association between hours of care and end-of-life transfers. Some altruistic motive for caregiving on behalf of the child seems necessary to explain the relative magnitudes of time and financial transfers. 4.2 Children s Family Obligations and Bequest Shares Though the model implies that parents receiving care from any child leave bequests exclusively to caregivers, it is clear that in the AHEAD sample parents with current care needs make positive endof-life transfers to non-caregiving children. Two candidate explanations for this behavior are that parents are altruistic toward their children as well, and do not base their estate division choices only on their children s willingness and ability to care for them, and that a cross-sectional observation of regular caregiving activities in a given year is an imperfect measure of a child s lifetime caregiving role. This subsection examines the role of child characteristics that predict lifetime caregiver status in determining transfer shares. subsection. The altruistic bequest hypothesis is considered in the following If measures of whether and how much weekly care is provided by each child in 1993 are imperfect predictors of the amounts of long-term care children are likely to offer their parents through the ends of their parents lives, then we might expect some parents with present care needs to bequeath positive amounts to children who currently provide no care. Given this concern, it would be ideal to have an indication of which children the parents in our sample expect to be caregivers in a lifetime sense. Understandably, the series of AHEAD questions regarding whether the parent hopes to receive care from her children should she require regular assistance in the future is asked only of parents without current care needs or assistance. that determine the difference in bequests to children conditional on unequal division. Among parents with long-term care needs and multiple children who meet the requirements for this sample excepting unequeal division, 360 have wills or life insurance and divide them about equally among their children. The behavior of this group may be explained by children who will not supply care at any feasible bequest level, children whose care hours are influenced equally by bequests, or simply parents with motives for the division of their bequests other than the maximization of care hours from children. 25 I find that the 126 sample children who provide at least one hour of assistance per week to one of the 260 sample parents average 23 weekly hours of care. 16

18 Where expected caregivers are unobservable, the dependence of end-of-life transfers on child characteristics that influence children s caregiving choices may be examined. Pezzin and Schone (1997, 2002) and Sloan, Picone and Hoerger (1997) find that children with spouses and greater numbers of children of their own are less likely to provide care for their parents. In the model of estate division and care in section 2, the assumption that time requirement γ j for child j increases with the presence of a spouse and children produces a similar connection between own-family commitments and care. The child chooses to join the set of contributors to the parent s care only if w j u 1 (w j (T γ j ) + N j + b j, C j ) < u 2 (w j (T γ j ) + N j + b j, C j ). (3) If we are willing to assume separability of the child s utility function in x j and C, it becomes apparent that a greater γ j time requirement due to greater own family demands for the child increases her marginal utility of own and family consumption x j, while leaving her marginal utility of the parent s total care unchanged. Higher values of γ j move the child out of the caregiving set, all else equal. Thus, children with spouses and more children of their own may fail to provide care where children with identical characteristics, save family structure, provide care. The model therefore supplies intuition for why a parent may transfer less to a child with a spouse or a greater number of children. Among children who currently provide no care, children with more extensive family obligations may not be lifetime caregivers, while comparable children who have fewer family obligations may be lifetime caregivers. According to the table 4 estimates, unmarried children and children with more married siblings are significantly more likely to receive bequests from parents with current care needs. This finding is consistent with the model implication that children with fewer family obligations are more likely caregivers. 26 The same pattern does not emerge for children of parents without current care needs where their parents predictions regarding the identities of future caregivers are included in the estimation. Table 5 coefficient estimates indicate that parents with care needs bequeath less to children with spouses and children of their own. This observation might be surprising if viewed with the expectation that parents are driven to make end-of-life transfers by altruistic or dynastic interests in the welfare of their progeny. 27 preferentially to expected caregivers. However, it is consistent with the notion that parents bequeath Estimates of the dependence of end-of-life transfers on child characteristics in families in which parents do not currently require care do not reflect a negative relationship between transfers and 26 However, the number of grandchildren associated with each child in the sample does not have the effect on end-of-life transfers to children implied by the hypothesis that outside family obligations make children less likely to provide care. 27 Though the finding regarding the number of children s children would appear to refute the presence of dynastic objectives for intergenerational giving, the results in table 6 on the division of inter-vivos transfers by parents with and without care needs do not. If larger families indicate more financial need (a hypothesis extended in Wilhelm (1996)), then altruistic parents would bequeath more to children with larger families. This implication is also inconsistent with the estimates in table 5. 17

19 marriage or children. In this sample of unequal bequest dividers in which we observe which children the parent expects to provide long-term care, only an indicator for whether each child is an expected caregiver and one for whether the child is a biological/adopted or step child are significant determinants of relative end-of-life transfers. Overall, table 5 shows a strong positive association between children s end-of-life transfer shares and indicators of present and expected caregiving, along with several qualitative differences in the manners in which parents with and without care requirements divide their estates. 4.3 Altruism, Compensatory Transfers, and Step-Families Models of altruistic bequests generally predict that parents compensate less well-off children, so that within the family we expect a negative relationship between the amounts bequeathed to children and children s permanent incomes under the hypothesis of altruism. 28 Estimates including indicators for whether each sibling earns more than $30,000 in 1993 and whether the parent knows what each sibling earns in specifications otherwise identical to those in table 4 do not produce qualitatively different results for children s and siblings caregiving behavior. The dependence of end-of-life transfers on the child s years of schooling and the indicator for whether the child earns more than $30,000 in both the correlated random effects and fixed effects specifications shows no indication of compensatory transfers. Thus, the estimates in tables 4 and 5 are not consistent with the hypothesis of strictly altruistic bequests. The empirical evidence does not suggest that the competing explanation of altruism is the reason that parents bequests deviate from perfect dependence on caregiver status. The one substantive addition to the results with the inclusion of child income variables is that a child whose parent does not require care is more likely to be included in her parent s will and life insurance policies if the parent answers questions indicating whether the child s income is above or below $30,000, and is also more likely to receive end-of-life transfers if the parent cannot place her siblings incomes above or below $30,000. Certainly the prediction that a parent bequeaths more to children with whom she is in closer contact is consistent with the model of bequests and elder care in section 2, as well as with several other theories of bequest behavior. Light and McGarry (2002) find that parents with step children are substantially more likely to divide their estates unequally among their children, and that this result is robust to a variety of specifications and sample inclusion criteria. The estimates reported in table 4 support the findings of Light and McGarry, in that step children are significantly less likely to be included in the wills or life insurance policies of their parents than are biological or adopted children. 4.4 Inter-Vivos Transfers With and Without Long-Term Care Finally, while end-of-life transfers are divided according to appreciably different criteria in families in which parents do and do not require long-term care, the division of inter-vivos transfers among 28 See, for example, Becker (1974) and Wilhelm (1996). 18

20 siblings follows the same qualitative pattern in both types of families. Table 6 reports fixed effects estimates of the dependence of inter-vivos transfers on child characteristics for the 117 families in which parents have care needs and make inter-vivos transfers, and the 252 families in which parents have no care needs and make inter-vivos transfers. Surprisingly, there is little difference between parents with and without care needs in the manner in which they divide inter-vivos transfers. The coefficient on the indicator for whether the child earns more than $30,000 reflects some compensation of lower income children. In the case of inter-vivos transfers, the coefficient on the number of the child s own children is positive and significantly different from zero at the one percent level. Older children of parents 70 and above receive fewer inter-vivos transfers. Finally, relative intervivos transfer amounts do not depend on care from children. The qualitative implications of the estimates in table 6 are consistent with the findings of McGarry and Schoeni (1997) regarding the division of inter-vivos transfers in the broader AHEAD sample. Though the evidence on the division of both end-of-life and previous transfers indicates a significant positive association between caregiving and transfer share, little evidence of a spot wage for elder care, either stated or implicit, has emerged from research using the AHEAD data Conclusion Children are the primary source of non-institutional long-term care for unmarried elderly parents in the U.S., providing roughly three times the monthly hours of care supplied to parents by paid and unpaid non-relatives and organizations combined. Only 6 percent of children who provide ongoing care to their parents receive direct payments for their time. Reported payments to this subset of child caregivers amount to an hourly wage that is substantially below the relevant minimum wage, as well as the effective wage to paid non-relative caregivers and organizations. Given that this substantial transfer of time from adult children to their elderly parents is not compensated directly, I examine the relationship between parents estate division choices and the care they receive or expect to receive from their children. Theories of the explicit exchange of bequests for elder care may be unconvincing or unpalatable, in that they require disabled elderly parents to condition their bequests on realized care from children, and children to withold care from parents in poor health whose bequeathable assets dwindle. I construct a model of family interactions over the division of end-of-life transfers and elder care in which children are altruistic toward a shared parent and divide their time between their own spouses and children and contributions to the care of the parent. Care contributed to the parent functions as a public good whose benefits all siblings may enjoy. The selfish parent is not able to condition bequests on realized care from her children, but may commit to any fixed division of her bequeathable assets among her children. Bequests behave as non-labor income for children, and a bequeathed dollar increases the consumption of both a private good and parental well-being by any child who contributes care to the parent. For this reason, parents transfer preferentially to children who are caregivers in a 29 See Henretta, Hill, Li, Soldo and Wolf (1997) for results on children s share of past transfers and current caregiving. 19