GCOE Discussion Paper Series
Global COE Program

Human Behavior and Socioeconomic Dynamics
Discussion Paper No.74

Parent-Child Co-residence and Bequest Motives in China

Ting Yin

August 2009GCOE Secretariat
Graduate School of Economics

OSAKA UNIVERSITY

1-7 Machikaneyama, Toyonaka, Osaka, 560-0043, Japan

Parent-Child Co-residence and Bequest Motives in China
By Ting Yin†
Graduate School of Economics, Osaka University
August 17, 2009
Abstract: In this paper, I discuss the actual conditions and the determinants ofco-residence between older parents and their children in China, especially the impact ofbequest motives on parent-child co-residence, using micro data from the “Survey of
Living Preferences and Satisfaction,” conducted at Osaka University.
Morespecifically, I use three subsamples of older respondents (those who live in urban areas,
those who live in rural areas, and the pooled sample of both) to analyze the impact ofbequest motives and other factors on the probability of parent-child co-residence. The
results are as follows: Bequest motives are strong in China, with more than 60 percent
of respondents having a bequest motive, and the parent-child co-residence rate is alsohigh (just under 60 percent). Bequest motives do not have a significant impact on theprobability of parent-child co-residence in any of the three samples. However, inurban areas of China, if older parents own their own homes, the probability that theyco-reside with their children increases as the value of their home increases. In rural
areas of China and in the country as a whole, the coefficient of parental income ispositive and significant in some cases, meaning that children are more likely to live with
their parents if parental income is higher. All of these results suggest that, in bothurban and rural areas of China, the Chinese are selfishly motivated and the life-cycle
model applies.
Keywords: Bequest motives; parent-child co-residence; life-cycle hypothesis; altruism
model; strategic bequest motive.
Journal of Economic Literature classification numbers: D91, E21
Note: I thank my thesis advisor, Professor Charles Yuji Horioka, for his valuable advice
and suggestions. I would also like to thank Kenn Ariga, Yasushi Iwamoto, Wataru
Kureishi, Fumio Ohtake, Masaru Sasaki, Junyi Shen, Tsuyoshi Tsuru, Midori
Wakabayashi, Ken Yamada, Atsushi Yoshida, and the participants of Prof. Horioka’s
graduate seminar at Osaka University and of the Spring 2009 meeting of the Japan
Economic Association for their helpful comments and Yoshiro Tsutsui for allowing me
to use the micro data from the “Survey of Living Preferences and Satisfaction.”†Correspondence to: Ting Yin, Institute of Social and Economic Research, Osaka
University, 6-1, Mihogaoka, Ibaraki 567-0047, JAPAN.
E-mail: yintingjp2001@yahoo.co.jp

1. Introduction
Are the Chinese selfish or altruistic?

In this paper, I discuss the actual conditions andthe determinants of co-residence between older parents and their children in China,
especially the impact of bequest motives on the probability of parent-child co-residence,using micro data from the 2006 “Survey of Living Preferences and Satisfaction” (urbanhouseholds) and the 2007 “Survey of Living Preferences and Satisfaction” (rural
households), which were conducted in Feb. 2006 and Mar. 2007, respectively, as part ofthe 21st Century Center of Excellence (COE) Program of the Graduate School of
Economics and the Institute of Social and Economic Research of Osaka University. In
so doing, I try to shed light on which theoretical model (the selfish life-cycle model orthe altruism model) applies in China.

The issue of which model of household behavior applies in the real world is an
important one, and it also has important policy implications. For example, the altruism
model implies that if parents leave a bequest to their children regardless of whether theirchildren provide anything in return, there is a danger that wealth inequalities will bepassed on, and increase, from generation to generation. By contrast, if the selfish
life-cycle model is valid, there is a danger that parents who do not have any
bequeathable wealth or who have bequeathable wealth but do not want to leave it totheir children will not be able to live with their children and receive care from them.

As far as I know, there have not been any previous studies of parent-child co-residencein China, but there have been a number of such studies in Japan and the United States.
For example, Ohtake and Horioka (1994) analyze the determinants of the probability of1parent-child co-residence of older parents and find that the probability that theyco-reside with their children increases as the value of their home increases, which
implies that the Japanese are selfishly motivated.

By contrast, Iwamoto and Fukui(2001) find that older parents are less likely to live with their children if parental income
is higher. At first sight, this finding appears to be contrary to the selfish life-cycle
model, but if living separately (privacy) is a normal good, parents would presumably
want to live separately from their children as long as they can afford to do so.

Yamada(2006) conducts a careful analysis of the determinants of intergenerational co-residence,
distance between residences, and frequency of contact between children and parents andfinds strong support for the selfish exchange motive but none for the demonstration
effect or mutual altruism.

Wakabayashi and Horioka (2008) analyze the determinantsof the co-residence behavior of elderly parents and their children and find that thelife-cycle model, the dynasty model, social norms and traditions and the altruism model,
especially the first three, are all applicable to some extent in Japan.

Kureishi and

Wakabayashi (2009) are the first to conduct a simultaneous analysis of co-residencewith one’s own parents and with one’s parents-in-law and find that the two decisions areinterrelated and that the Japanese are selfishly motivated. Thus, virtually all of thestudies for Japan find that parent-child co-residence is selfishly motivated andconsistent with the life-cycle model.

Finally, Dekle (1990) does not look atparent-child co-residence explicitly but finds that the wealth holdings of the elderly do
not depend on the number of children, which suggests the absence of an altruistic
bequest motive and is consistent with the findings of the other studies.

Horioka, et al. (1998), Horioka, et al. (2000) and Horioka (2008) present data on the2

impact of bequest motives on the probability of parent-child co-residence and find thatparents who have a bequest motive have a much higher probability of co-residing with
their children in Japan but that there is no clear relationship between the two in the U.S.
These results suggest that the life-cycle model is applicable in Japan and that theJapanese are selfish but that the altruism model is applicable in the U.S and that
Americans are altruistic.

Thus, there have been a number of studies of parent-child co-residence behavior inJapan and the U.S., but as far as I know, this paper is the first one to analyze thedeterminants of the probability of parent-child co-residence in China, and in this sense,
this paper makes an original and important contribution.

To summarize my findings, I use three subsamples of older respondents (defined as
those who are aged 50 or old)--those who live in urban areas, those who live in rural
areas and the pooled sample of both--to analyze the impact of bequest motives and otherfactors on the probability of parent-child co-residence.

The results are as follows:

Bequest motives are strong in China, with more than 60 percent of respondents having abequest motive, and the parent-child co-residence rate is also high (just under 60
percent).

Bequest motives do not have a significant impact on the probability ofparent-child co-residence in any of the three samples.

However, in urban areas ofChina, if older parents own their own homes, the probability that they co-reside with
their children increases as the value of their home increases.

In rural areas of China

and in the country as a whole, the coefficient of parental income is positive andsignificant in some cases, meaning that children are more likely to live with their3parents if parental income is higher. All of these results suggest that in both urban andrural areas of China, the Chinese are selfishly motivated and the life-cycle model
applies.

This paper is organized as follows: in Section 2, I discuss two theoretical models ofhousehold behavior with emphasis on their implications for parent-child co-residence
and bequest motives; in Section 3, I describe the data sources used in my analysis; inSection 4, I explain the variable definitions: in Section 5, I describe the estimation
model; in Section 6, I present descriptive statistics on the variables used in the analysis
with emphasis on parent-child co-residence and bequest motives; in Section 7, I present
my estimation results; and in Section 8, I summarize my findings and discuss the policy
implications of my findings.

2. Theoretical Models of Household Behavior and Their Implications for
Parent-Child Co-residence and Bequest Motives

In this section, I briefly describe two theoretical models of household behavior and theimplications of these models for parent-child co-residence and bequest motives.

(1) The life-cycle model: This model assumes that parents are selfish and do not careabout their children.

Thus, if this model is valid, parents will not leave any

bequests at all to their children or will leave bequests only when their children
provide something in return such as co-residence, care, and/or financial support
during old age.

Children are also selfish and do not care about their parents in this4

model.

Thus, if this model is valid, children will live with their parents or care forthem only if their parents provide something in return such as bequests. Thus,
parents-child co-residence can be explained by this model, and it predicts a positive
relationship between parent-child co-residence and bequest motives.

(2) The altruism model: This model assumes that parents harbor intergenerational
altruism toward their children.

Thus, if this model is valid, parents will leave abequest to their children regardless of whether or not their children provide
something in return.

If children also harbor intergenerational altruism toward theirparents, they will live with their parents and/or care for them even if they do notreceive anything in return from their parents. Therefore, this model can explain
parent-child co-residence and predicts that there will not necessarily be any
relationship between parent-child co-residence and bequest motives.

3. Data Sources

In this section, I describe the three data sources used in this analysis.

(1) “Survey of Living Preferences and Satisfaction” (urban households)
The “Survey of Living Preferences and Satisfaction” (urban households) (hereafterreferred to as the ”Urban Survey”) was conducted in February 2006 as part of the
21st Century Center of Excellence (COE) Program of the Graduate School of
Economics and the Institute of Social and Economic Research of Osaka University.
1500 respondents aged 20 to 69 living in six major cities (Shanghai, Beijing,5Chengdu, Guangzhou, Shenyang, and Wuhan) of China were selected at random andinterviewed face-to-face.

(2) “Survey of Living Preferences and Satisfaction” (rural households)
The “Survey of Living Preferences and Satisfaction” (rural areas) (hereafter referred
to as the “Rural Survey”) was conducted in March 2007 and used a questionnaire
similar to the “Urban Survey.”

500 respondents aged 20 to 69 living in six rural

areas (Ezhou, Shiyan and Suizhou of Hubei province and Hurudao, Panjin andYinkou of Liaoning province) of China were selected at random and interviewed
face-to-face.

Both of these two surveys collect a variety of detailed information on respondents
and their family members--for example, on their age, sex, marital status, occupation,
educational attainment, number of children, living arrangements, income, and bequest
motives.

Thus, they are well-suited for conducting the analysis in this paper.

I used the sample of widowed males and married couples with children for which themale household head is 50 years old or older and for whom all of the necessary
information is available.

(3) “Main Indicators of Real Estate in 35 Large and Medium-sized Cities” (2005)
Data on the sales price of condominiums per square meter by city in China weretaken from this data source.

These data are included in Chapter 6 of the 2006

edition of the Statistics Yearbook of China (National Bureau of Statistics of China
6

(2006)).

4. Variable Definitions

In this section, I define the dependent and explanatory variables used in my analysis.

The dependent variable I use is as follows:

CORES (a dummy variable for parent-child co-residence)

The Urban Survey collects detailed information on the composition of respondents’families. Respondents were asked which of the following choices corresponds to theirown family composition:

1. Live alone
2. Couple only
3. Couple and children
4. Parents and couple
5. Couple, children, and parents
6. Couple, children, parents, and siblings of the couple
7. Other
8. Male and female friends
7

In the Rural Survey, the same question was asked and the choices were the same exceptthat choice 8 was not included.

CORES is a dummy variable that equals one if respondents live with adult children andzero otherwise.

More specifically, if respondents chose options 3, 4, 5 or 6 and theirchildren are aged 18 or older, CORES was given a value of one, but if respondents
chose options 3, 4, 5 or 6 and their children are aged 17 or younger, or if they chose
options 1 or 2, CORES was given a value of zero.

Respondents who chose options 7

or 8 were dropped from the sample. In the Rural Survey, there is an additional option(“parents only”), which is presumably a subset of option 7, and respondents who chose
this option were given a value of zero.

The explanatory variables I used are as follows:

BEQUEST (bequest motive dummy)
In both the Urban and Rural Surveys, respondents were asked whether or not they wantto leave as large a bequest as possible to their children, etc. The options given were as
follows:

1.

I think so

2.

I tend to think so
8

3.

I cannot say one way or the other4.

I tend not to think so

5.

I do not think so

BEQUEST is a dummy variable that equals one if parents think (or tend to think) thatparents should leave as large a bequest as possible to their children, etc. and zerootherwise.

INCOME (parental income)INCOME is the monthly income of the respondent and his or her spouse.

INCOME isin units of 10,000 yuan.

WORK (a dummy variable for the employment status of the male household head)In both the Urban and Rural surveys, respondents were asked which of the following
choices corresponds to their occupation and their spouse’s occupation:

1. Clerical worker (general, business-related, etc.)
2. Sales worker (retail shop owner, sales clerk, sales representative, etc.)
3. Managerial worker (government or company worker with the rank of section chief orhigher, member of the board of directors, etc.)
4. Professional or technical worker (teacher, doctor, engineer, writer, etc.)95. Service worker (hairdresser, waiter, waitress, taxi driver, security guard, etc.)
6. Blue-collar worker (carpenter, repairperson, factory worker, etc.)
7. Agriculture, forestry, and fisheries
8. Housewife or househusband (part-time worker)
9. Housewife or househusband (unemployed)
10. Student
11. Retired (excluding housewife and househusband)
12. Unemployed (excluding for housewife and househusband)
13. Other

WORK is a dummy variable that equals one if the respondent chose options 1 to 7 andzero if the respondent chose options 8 to 12. Respondents who chose options 13 were
dropped from the sample.

W (cross-product of INCOME and WORK)W was calculated as INCOME * WORK.

HOME (homeownership dummy)
In both the Urban and Rural Surveys, respondents were asked if they own their own
homes.

HOME is a dummy variable that equals one if respondents own their own

homes and zero otherwise.

However, this variable was not included when the rural
10

sample was used because almost all respondents living in rural areas own their own
homes.

RR (housing price index)
RR is a housing price index calculated as the sales price of condominiums per square
meter in each city divided by the average income of households with a male household
head aged 50 years old or older in that city.

However, this variable was not included

when the rural sample or the full sample were used because data on the sale price ofcondominiums per square meter are not available in the case of rural areas.

H (cross-product of RR and HOME)
H was calculated as RR * HOME.

HAGE (the age of the male household head)
HAGE is the age of the male household head.

HEDU (dummy for the male household head’s educational attainment)
HEDU is a dummy variable that equals one if the final educational attainment of themale household head is graduation from junior college or higher (options 5 to 11) andzero otherwise.

11

MARRY (dummy for the male household head’s marital status)
MARRY is a dummy variable that equals one if respondents chose option 2 (married
and living with spouse) and zero otherwise.

RURAL (rural dummy)
RURAL is a dummy variable that equals one if the respondent is a rural household andzero otherwise (if the respondent is an urban household).

This variable was included

only when the full sample was used.

5. Estimation ModelIn this section, I describe the estimation model used in my analysis.

I use thefollowing probit model:

Prob (CORES=1) = a ＋ b(BEQUEST) ＋ c(INCOME) + dH + eX
(X: other explanatory variables)

Regarding BEQUEST, if children are selfish, they would be expected to live with theirolder parents only if their parents provide something in return such as bequests.

Thus,

the coefficient of BEQUEST should be positive. By contrast, if children are altruistic,
parent-child co-residence should not depend on the bequest motives of parents and thus
the coefficient of BEQUEST should be zero.

12

Regarding parental income (INCOME), if children are selfish, parental income shouldhave a positive effect on parent-child co-residence and the coefficient of INCOME
should be positive.

By contrast, if children are altruistic, parental income should haveno effect on parent-child co-residence and thus the coefficient of INCOME should bezero.

I also tried introducing the cross-product of INCOME (parental income) and

WORK (a dummy for the employment status of the male household head), because I
wanted to control for the fact that parental income will be a smaller fraction of lifetime
income in the case of retired heads than in the case of working heads.

Regarding the parents’ home, if children are selfish and older parents own their own
homes, the probability that older parents co-reside with their children should increase as
the value of their home increases. Thus, the coefficient of the cross-product of HOME
and RR should be positive.

By contrast, if children are altruistic, the coefficient of thecross-product of HOME and RR should have no effect on the probability that theyco-reside with their children and thus the coefficient of the cross-product of HOME andRR should be zero. I used the cross-product of HOME and RR because housing prices
should affect the probability of parent-child co-residence only in the case of
homeowners, but I also included HOME by itself as an additional explanatory variablebecause it might have an effect independent of housing prices. .

Because the probability that older parents co-reside with their children should increase
with parental income primarily if they have a bequest motive, I tried including thecross-product of BEQUEST and INCOME as an additional explanatory variable, but
because the coefficient of this cross-product term was not at all significant, I dropped it
13

from the final specification.

Besides the probit model I just described, I also estimated a bivariate probit model totest whether the co-residence behavior of older parents and their children and bequest
motives of older parents are determined simultaneously.

I found that I could not reject

the null hypothesis that the correlation between the error terms of the two equations iszero, and moreover, the coefficients of the explanatory variables in the bequest motive
equation were not significant and the coefficient of the explanatory variables in the
co-residence equation were almost the same as before.

Thus, I present only theestimation results of the probit model .

6. Descriptive Statistics

In this section, I present descriptive statistics on the variables used in the analysis withemphasis on parent-child co-residence and bequest motives.

Table 1 shows descriptive statistics for all variables used in the analysis, and as can beseen from this table, the average co-residence rate is about 59 percent in urban areas,
rural areas, and the country as a whole. Thus, there is a strong tendency of older
parents to live with their children in China, and this tendency is equally strong in urban
and rural areas.

Table 2 presents data on bequest motives, and if those who think (or tend to think) thatparents should leave as large a bequest as possible to their children, etc., are regarded as
14having a bequest motive, the proportion of the older with a bequest motive is 62.4
percent in urban areas, 69.7 percent in rural areas, and 64.1 percent in the country as awhole. Thus, it seems that the Chinese have a strong bequest motive and that bequest
motives are somewhat stronger in rural areas than in urban areas.

Table 3 shows parent-child co-residence rates by bequest motive, and as can be seenfrom this table, there is some evidence of a positive correlation between the two.

In allthree subsamples (urban households, rural households, and all households), theparent-child co-residence rate of respondents who have the second strongest bequest
motive (option 2) is second highest and that of respondents who have the weakest
bequest motive (option 1) is by far the lowest, but there is no clear pattern in the case of
the other options..

Thus, this table provides weak evidence in favor of the life-cycle

model, but a definitive verdict must await the results of the more formal test presented
in the next section.

Lastly, I present data on parent-child co-residence and bequest motives from aninternational comparative perspective (see Table 4). As can be seen from Table 4, theproportion of older respondents who have a strong bequest motive is lowest (only about
18 percent) in Japan, intermediate (about 44 percent) in the U.S. and highest (about 66
percent) in China.

By contrast, the parent-child co-residence rate of older respondents

is extremely low in the U.S. (only about 10 percent), intermediate (about 50 percent) inJapan, and highest (about 59 percent) in China.

In other words, in Japan, bequest

motives are relatively weak and the parent-child co-residence rate of older individuals is
15

relatively high, in the U.S., bequest motives are relatively strong and the parent-childco-residence rate of older individuals is extremely low, while in China, both bequest
motives and the parent-child co-residence rate of older individuals are high.

7. Estimation Results concerning the Determinants of Parent-Child Co-residence

In this section, I present the estimation results of my probit analysis of the determinantsof parent-child co-residence.

Tables 5-7 show the estimation results for urbanhouseholds, rural households and all households, respectively.

As can be seen from Table 5, in the case of urban households, the coefficient of thebequest motive dummy is insignificant in all cases but the coefficient of thecross-product of the housing price index and the homeownership dummy is positive andsignificant. Thus, if older parents own their own homes, the probability that theyco-reside with their children increases as the value of their home increases, implyingthat their children are selfishly motivated and that the life-cycle model applies.

The

coefficient of the homeownership dummy entered in isolation is negative and significant,which means that the co-residence rate of renter households is higher than that of
homeowner households whose homes have no value, which is not surprising. I also
tried including the housing price index alone as an additional explanatory variable.
When I did so, its coefficient was positive and significant, but the results are notpresented in the table because the theoretical justification for doing so is weak.

16

As can be seen from Table 6, in the case of rural households, the coefficient of thebequest motive dummy is insignificant, as in the case of urban households. However,the coefficient of parental income is positive and significant in one of the four cases,
meaning that children are more likely to live with their parents if parental income ishigher.

This result suggests that children are selfishly motivated and that the life-cycle

model applies.

The coefficient of the dummy variable for the employment status of

the male household head is positive and significant, which implies that children are
more likely to live with their parents if the head is working.

As can be seen from Table 7, in the case of all households, the coefficient of the bequest
motive dummy is again insignificant, as in the case of urban and rural households.
The coefficient of parental income and the dummy variable for the employment statusof the male household head are positive and significant in two out of four cases.

These

results are consistent with the results for rural households, and the former result implies
that children are selfishly motivated and that the life-cycle model applies.

Moreover, the coefficient of the male household head’s age is negative and significant inall three subsamples.

This result suggests that children become less likely to live with

their parents as their parents age.

The reason for this is a topic for further research.

Thus, I found evidence of selfish behavior in all three subsamples, which suggests thatthe life-cycle model applies in urban as well as rural areas of China.

8. Conclusions and Policy Implications
17

In this paper, I discuss the actual conditions and the determinants of co-residence
between older parents and their children in China, especially the impact of bequest
motives on the probability of parent-child co-residence, using micro data from the“Survey of Living Preferences and Satisfaction,” which was conducted as part of the
21st Century Center of Excellence (COE) Program of the Graduate School of
Economics and the Institute of Social and Economic Research of Osaka University.
More specifically, I use three subsamples of older respondents (defined as those who are
aged 50 or old)--those who live in urban areas, those who live in rural areas, and thepooled sample of both--to analyze the impact of bequest motives and other factors on
the probability of parent-child co-residence.

The results are as follows: Bequest

motives are strong in China, with more than 60 percent of respondents having a bequest
motive, and the parent-child co-residence rate is also high (just under 60 percent).
Bequest motives do not have a significant impact on the probability of parent-childco-residence in any of the three samples.

However, in urban areas of China, if older

parents own their own homes, the probability that they co-reside with their children
increases as the value of their home increases.

In rural areas of China and in the

country as a whole, the coefficient of parental income is positive and significant in somecases, meaning that children are more likely to live with their parents if parental income
is higher. All of these results suggest that, in both urban and rural areas of China, theChinese are selfishly motivated and the life-cycle model applies, as in Japan and unlikein the U.S.

Turning finally to the policy implications of my findings, my finding that the value of18

parents’ homes has a positive impact on the parent-child coresidence rate of homeownerhouseholds in urban areas and my finding that parental income has a positive impact on
the parent-child co-residence rate of rural households and of all households implies thatchildren are not likely to co-reside with, or care for, their older parents if their parents
have little or no housing assets and little or no income.

Thus, in turn, implies that it isdesirable to introduce a public long-term care insurance program and/or to expand the
public pension system so that elderly individuals with little or no assets and income canreceive adequate care and financial support.

One other policy implication of my findings is that since parent-child co-residence isselfishly motivated and a quid pro quo for bequests from parents to children, net
intergenerational transfers from parents to children (net of the market value of care andco-residence provided by children to their parents) are not necessarily large or evenpositive, meaning that there is little need to worry about wealth inequities being passed
on from generation to generation.

19

References

Dekle, Robert (1990), "Do the Japanese Elderly Reduce Their Total Wealth?

A New

Look with Different Data," Journal of the Japanese and International Economies, vol. 4,
no. 3 (September), pp. 309-317.

Horioka, Charles Yuji (2008), “Nihon ni okeru Isan Douki to Oyako Kankei: Nihonjin
ha Riko-teki ka, Rita-teki ka, Ouchou-teki ka? (Bequest Motives and Parent-Child
Relations in Japan: Are the Japanese Selfish, Altruistic, or Dynastic?),” in Charles Yuji
Horioka and Institute for Research on Household Economics, eds, Setai-nai Bunpai to
Sedai-kan Iten no Keizai Bunseki (An Economic Analysis of Intra-Household
Distribution and Inter-Household Transfers) (Tokyo, Japan: Minerva Shobou), pp.
118-135 (in Japanese).

Horioka, Charles Yuji; Fujisaki, Hideki; Watanabe, Wako; and Ishibashi, Shohei (1998),“Chochiku Douki/Isan Douki no Nichibei Hikaku” (A U.S.-Japan Comparison of
Saving and Bequest Motives), in Charles Yuji Horioka and Koji Hamada, eds, Nichibei
Kakei no Chochiku Koudou (The Saving Behavior of U.S. and Japanese Households)(Tokyo: Nihon Hyouronsha), pp. 71-111 (in Japanese).
20Horioka, Charles Yuji; Fujisaki, Hideki; Watanabe, Wako; and Kouno, Takatsugu (2000),“Are Americans More Altruistic than the Japanese? A U.S.-Japan Comparison of Saving
and Bequest Motives,” International Economic Journal, vol. 14, no. 1 (Spring), pp.
1-31.

Iwamoto, Yasushi, and Fukui, Tadashi (2001), “Doukyo Sentaku ni okeru Shotoku no
Eikyou (The Effect of Income on Living Arrangements).” Nihon Keizai Kenkyu, no. 151,
pp. 21-43 (in Japanese).

Kureishi, Wataru, and Wakabayashi, Midori (2009), "One's Own Parents or One's
Spousal Parents: A Question of Strategic Bequest Motives," mimeo., Faculty of
Economics, Osaka Prefecture University, Osaka, Japan.

National Bureau of Statistics of China (2006), ed., China Statistical Yearbook, 2006
edition.

http://www.stats.gov.cn/tjsj/ndsj/2006/indexch.htm

Ohtake, Fumio. and Horioka, Charles Yuji (1994), “Chochiku Douki (Saving Motives)”
in Tsuneo Ishikawa, ed., Nihon no Shotoku to Tomi no Bunpai (The Distribution ofIncome and Wealth in Japan) (Tokyo: University of Tokyo Press), pp. 211-244 (inJapanese).

Wakabayashi, Midori, and Horioka, Charles Yuji (2009), “Is the Eldest Son Different:
The Residential Choice of Siblings in Japan,” Japan and the World Economy，
21

forthcoming.

Yamada, Ken (2006), "Intra-family Transfers, Intergenerational Co-residence, Distance,
and Contact," Applied Economics, vol. 38, no. 16, pp. 1839-1861.

22

Table 1: Descriptive Statistics for Dependent Variable and Explanatory Variables
Variable
MeanStandard
Minimum
Maximum
deviation
Urban households
CORES
0.591
0.492
0
1
BEQUEST
0.624
0.485
0
1
INCOME
0.213
0.125
0
0.7
MARRY
0.957
0.202
0
1
HOME
0.669
0.471
0
1
DEDU
0.087
0.287
0
1
AGEH
58.028
6.229
50
82
RR
2.201
0.271
1.75
2.593
HOME*RR
1.454
1.046
0
2.593
WORK
0.341
0.475
0
1
WORK*INCOME
0.089
0.149
0
0.7
Rural households
CORES
0.587
0.494
0
1
BEQUEST
0.697
0.461
0
1
INCOME
0.071
0.043
0.013
0.208
MARRY
0.974
0.159
0
1
AGEH
57.303
5.573
50
75
WORK
0.942
0.235
0
1
WORK*INCOME
0.066
0.045
0
0.208
All households
CORES
0.590
0.492
0
1
BEQUEST
0.641
0.480
0
1
INCOME
0.179
0.127
0
0.7
MARRY
0.961
0.193
0
1
HOME
0.743
0.437
0
1
DEDU
0.070
0.255
0
1
AGEH
57.855
6.082
50
82
RURAL
0.240
0.427
0
1
WORK
0.485
0.500
0
1
WORK*INCOME
0.083
0.132
0
0.7
Note: INCOME is in units of 10,000 yuan.
SampleData Source: The data were taken from the China surveys of the “Survey of Living
Preferences and Satisfaction,” which was conducted as part of the 21st Century
Center of Excellence (COE) Program of Osaka University.
http://www2.econ.osaka-u.ac.jp/coe/.

23

Table 2: Descriptive Statistics for Bequest Motives
Urban households
Rural households
I want to leave as large a bequest as
possible to my children,etc.
I think so
17.48
(86)
18.71
(29)
I tend to think so
44.92
(221)
50.97
(79)
I can't say one way or the
27.03
(133)
20.00
(31)
other
I tend not to think so
9.15
(45)
8.39
(13)
I do not think so
1.42
(7)
1.94
(3)
Total
100.00(492) 100.00(155)
Note: The left-hand figures indicate the proportion of respondents, and the right-handfigures in parentheses indicate the number of observations.
Data Source: The data were taken from the China surveys of the “Survey of Living Preferences
and Satisfaction,” which was conducted as part of the 21st Century Center of
Excellence (COE) Program of Osaka University.
http://www2.econ.osaka-u.ac.jp/coe/.

24

All households

17.77
46.37
25.35

(115)
(300)
(164)

8.96
1.55
100.00

(58)
(10)
(647)

Table 3: The Parent-Child Co-residence Rate by Bequest Motive
The parent-child coThe number ofresidence rate (percent)observations
I want to leave as large a bequest as possible to my children, etc
Urban households
56.98
86① I think so
60.18
221
② I tend to think so
60.90
133
③ I can't say one way or the
other
57.78
45
④ I tend not to think so
28.57
7⑤ I do not think so
Total
59.10
492
Rural households
44.83
29① I think so
60.76
79② I tend to think so
61.29
31③ I can't say one way or the
other
53.85
13
④ I tend not to think so
33.33
3⑤ I do not think so
Total
58.70
155
All households
56.52
115
① I think so
I
tend
to
think
so
60.33
300
②
60.96
164
③ I can't say one way or the
other
56.90
58
④ I tend not to think so
30.00
10⑤ I do not think so
Total
59.00
647
Data Source: The data were taken from the China surveys of the “Surveyof Living Preferences and Satisfaction,” which was conducted
as part of the 21st Century Center of Excellence (COE)
Program of Osaka University
http://www2.econ.osaka-u.ac.jp/coe/.

25

Table 4: International Comparison of Bequest Motives and Parent-Child Co-residence
Japan
U.S.
China
The proportion of respondents with a
18.09
44.71
65.96
bequest motive (all ages）
The parent-child co-residence rate of
49.70
10.05
59.00
older parents
Note: The parent-child co-residence rate for Japan and the U.S. pertain to respondents who
are aged 60 or older, while that for China pertain to respondents who are aged 50 or older.
Data Source: The data for China were taken from the China surveys of the “Survey of Living
Preferences and Satisfaction,” which was conducted as part of the 21st Century
Center of Excellence (COE) Program of Osaka University.
http://www2.econ.osaka-u.ac.jp/coe/.
The data for Japan and the U.S. were taken from Horioka, et al. (2000).

26

Table 5: Determinants of Parent-Child Co-Residence of Urban Households
Explanatory
variable
BEQUEST
INCOME
WORK

Model 1Model 2Model 30.006
(0.14)
0.295(1.52)
0.124(2.53)**-0.001(0.01)
0.305(1.52)
0.066(1.17)-0.484(2.40)**
0.246(2.31)**-0.480(2.37)**
0.243(2.27)**-0.009(2.25)**-0.045(0.53)
0.159(1.41)

W
HOME
H
HAGE
HEDU
MARRY

0.161
(1.42)

Model 40.004
(0.10)
0.113(0.44)
0.036(0.36)
0.404(1.04)-0.493(2.46)**
0.252(2.36)**

0.170(1.49)

Number of
492
492
492
observations
Note: The figures in the first row show marginal effects, and the figures in parentheses in thesecond row show the absolute values of the z statistics.
* significant at the 10 percent level; ** significant at the 5 percent level; *** significant at the 1
percent level.

27-0.003(0.07)
0.093(0.35)-0.040(0.38)
0.476(1.21)-0.492(2.44)**
0.250(2.34)**-0.010(2.29)**-0.055(0.65)
0.169(1.49)
492

Table 6: Determinants of Parent-Child Co-Residence of Rural Households
Explanatory
variable
BEQUEST
INCOME
WORK

Model 1Model 2-0.060(0.07)
1.766（1.82）*
0.525（2.83）***-0.047(0.51)
1.093(1.08)
0.501（2.62）***

0.082(0.33)-0.021（2.64）***
0.096(0.38)

W
HAGE
MARRY

Model 3Model 4-0.003(0.03)-3.379(0.44)
0.193(0.29)
5.238(0.68)

0.081(0.32)

Number of
155
155
155
observations
Note: The figures in the first row show marginal effects, and the figures in parentheses in thesecond row show the absolute values of the z statistics.
* significant at the 10 percent level; ** significant at the 5 percent level; *** significant at the 1
percent level.

28-0.044(0.48)-1.819(0.24)
0.330(0.53)
2.979(0.39)-0.020（2.58）**
0.094(0.37)
155

Table 7: Determinants of Parent-Child Co-Residence of All Households
Explanatory
variable
BEQUEST
INCOME
WORK

Model 1Model 20.006
(0.14)
0.325(1.71)*
0.158(3.33)***-0.004(0.10)
0.333(1.68)*
0.092(1.75)*-0.034(0.72)-0.035(0.75)-0.012(3.19)***-0.077(0.92)
0.15(1.47)-0.020(0.30)

W
HOME
HAGE
HEDU
MARRY
RURAL

0.153
(1.48)-0.049(0.76)

Model 3Model 40.005
(0.13)
0.231(0.89)
0.118(1.32)
0.194(0.54)-0.035(0.75)

0.156(1.51)-0.033(0.47)

Number of
647
647
647
observations
Note: The figures in the first row show marginal effects, and the figures in parentheses in thesecond row show the absolute values of the z statistics.
* significant at the 10 percent level; ** significant at the 5 percent level; *** significant at the 1
percent level.

29-0.004(0.10)
0.231(0.88)
0.048(0.53)
0.213(0.58)-0.037(0.79)-0.012(3.18)***-0.082(0.98)
0.153(1.50)-0.003(0.05)
647