Many studies of intergenerational exchanges include parent-child proximity as an exogenous explanatory variable. Proximity may itself be a consequence of intergenerational resource flows, however. We analyze patterns of economic transfers between generations and their relationship to parent-child proximity in Italy. Parental support for a child's home purchase may influence the child's choice of location, whether to facilitate parent-child contacts, grandchild care, or parent care. We examine the situation of married couples, focusing on housing help received and the association of that help with proximity to each spouse's parents. Using 1998 survey data and multinomial logistic regression models, we find that past housing assistance has a significant effect on current proximity to each spouse's parents, controlling for parents' survival, family composition, and other factors.
Key Words: family relations, intergenerational transfers, proximity.
Several studies have considered the correlates of parents' financial transfers to children and the effects of such transfers on outcomes such as the parents' subsequent receipt of care (Cigno, Giannelli, & Rosati, 1998; Henretta, Hill, Soldo, & Wolf, 1997; McGarry & Schoeni, 1995, 1997; Pezzin & Schone, 1999; Soldo & Hill, 1995). The existing literature, mainly American, has also examined possible motivations for intergenerational transfers. Sociologists and economists often refer to two primary models: parent-to-child transfers may be motivated by parental concern about a child's perceived need (the altruism model), or the transfers may be made in the expectation of receiving services from the children, currently or later in life (the exchange model). Whatever the underlying motivations, there are many strategies that parents and children can adopt with respect to economic transfers and the creation and discharge of care obligations over the life course. These strategies are manifested at key transitions in the parents' and children's life cycles. For example, the timing of a child's departure from the parental home may be influenced by transfers of income or wealth, such as help with wedding or housing expenses. Moreover, parents may support a child's home purchase in order to influence the child's location. Having one's adult children nearby may facilitate parent-child contacts or grandchild care, or secure the provision of personal care or assistance in case of disability or poor health.
If parents' actions do influence their children's location decisions, then the proximity of adult children to their older parents reflects, in part, decisions reached earlier in life. Those earlier decisions may, in turn, reflect expectations regarding intergenerational contact and support, suggesting a complex interrelationship between parent-child interactions and proximity. Studies of intergenerational transfers, relationships, or contact, however, often include intergenerational proximity as an explanatory variable. Some studies have included measures of spatial proximity with no evident concerns about possible endogeneity bias (Aldous & Klein, 1991; Amato, Rezac, & Booth, 1995; Finley, Roberts, & Banahan, 1988; Hogan, Eggebeen, & Clogg, 1993; Spitze & Logan, 1991). Dewit, Wister, and Burch (1988) and Stern (1995) did acknowledge the possibility of reverse causality and attempted to solve the problem through their selection of cases for analysis. Endogeneity bias may arise in either of two ways. First, parents' or children's wishes to provide or receive transfers at a future date may influence, or at least lead them to attempt to influence, location decisions (i.e., true reverse causality). Second, both spatial proximity and transfer behavior may depend on common omitted variables such as the strength of familial affective bonds.
Italy provides an interesting setting for the analysis of intergenerational relations because it is characterized by late exit from the parental home (Billari, Castiglioni, Castro Martin, Michelin, & Ongaro, 2000); strong intergenerational links manifested in patterns of coresidence (Tomassini & Wolf, 2000) and proximity (Glaser & Tomassini, 2000); and prevalent economic and noneconomic flows between parents and children. …