Discussion Paper No. 575

INTRA-FAMILY TRANSFERS IN JAPAN:
INTERGENERATIONAL CO-RESIDENCE,DISTANCE, AND CONTACT

Ken Yamada
The Fifth ISER-Moriguchi Prize (2003)
Awarded Paper

March 2003

The Institute of Social and Economic Research
Osaka University
6-1 Mihogaoka, Ibaraki, Osaka 567-0047, Japan

Intra-family Transfers in Japan:
Intergenerational Co-residence, Distance, and Contact∗†
Ken Yamada‡March, 2003

Abstract
Classiﬁed broadly, two motives for intra-family transfers exist: altruism and selﬁshness. This
paper examines two selﬁsh hypotheses − the exchange motive (strategic bequest motive) and thedemonstration eﬀect − using a new Japanese micro data set. My analysis of the determinantsof intergenerational co-residence, distance between residences, and frequency of contact yields
considerable support for the exchange motive but no support for the demonstration eﬀect. The
ﬁndings are consistent with the exchange motive after distinguishing it from mutual altruism
using a speciﬁc question.

Keywords: Intra-family transfers; Bequest motives; Co-residence
JEL Classif ication: J1∗

I am grateful to Fumio Hayashi, Daiji Kawaguchi, Colin Ross McKenzie, Hisahiro Naito, Fumio Ohtake, Jun
Tomioka, and especially Charles Yuji Horioka, to anonymous referees of the ISER/Moriguchi Prize, and to participantsof the CIRJE-TCER Macro Conference and of seminars at Hitotsubashi University and Osaka University for theirvaluable comments. I would also like to thank the Japan Institute of Life Insurance and the Social Science Japan Data
Archive at University of Tokyo for allowing me to use their data. All errors are mine alone.
†
This paper received the 2003 Osaka University Institute of Social and Economic Research/Moriguchi Prize, which
is awarded annually by the Institute of Social and Economic Research, Osaka University, to the best economics paper
by a Japanese graduate student or by a foreign graduate student studying in Japan.
‡
Institute of Social and Economic Research, Osaka University, 6-1 Mihogaoka, Ibaraki, Osaka 567-0047, Japan;
E-mail: kyamada@iser.osaka-u.ac.jp

1

Introduction

The members of a family are linked via various channels. The links within an extended family arecloser in East Asia than in Western Europe or the U.S. As evidence of the closeness of family ties
in East Asia, intergenerational co-residence abounds despite showing a downward trend.1 In Japan,
it is still common for children to live with their parents, and it is still rare for the elderly to live in
an institution. Although closer links and interactions within families in Japan are well-known facts,
empirical research on intra-family transfers is lacking in Japan. The reasons for the strong familyties in Japan have not yet been clariﬁed. The motives for intra-family interactions have important
implications for economic theory, ﬁscal policy, and income redistribution (Becker 1974, Barro 1974,
Bernheim, Shleifer, and Summers 1985, and Altonji, Hayashi, and Kotlikoﬀ 1992, 1996). At present,
how to support the elderly in an aging society is an important policy issue.
This paper conducts an analysis of intergenerational transfers from children to parents in Japan
using three measures: intergenerational co-residence, distance between residences, and frequency ofcontact. It is necessary to analyze not only the frequency of contact between family members living
apart but also co-residence since a non-negligible proportion of Japanese live with their parents evenafter growing up. I analyze the determinants of co-residence, distance, and contact between parents
and children with emphasis on the impact of bequest motives using micro data from the Survey onLife Planning in the Age of Long Life. This paper is the ﬁrst research to use this data set.
This paper is organized as follows. The next section presents a literature review on intra-familytransfers and summarizes the theoretical models and their empirical implications. I focus mainly
on two strategic motives for intra-family transfers from children to parents. One hypothesis is
the exchange motive (Bernheim, Shleifer, and Summers 1985 and Cox 1985) and the other is thedemonstration eﬀect (Cox and Stark 1995). Previous studies using U.S. data have obtained support
for both hypotheses, even when the same data set is used. Previous studies using Japanese dataalso draw diﬀerent conclusions.
Section 3 reviews the cultural background in Japan using data from two international comparative
surveys. First, the International Comparative Survey on the Lives and Attitudes of the Elderly(ICSLAE) shows the closeness of family ties in Japan: The elderly in Japan are more likely toco-reside with their children. to see them frequently, and to expect family members to help out if
1

See Cho and Yada (1994) and Masson, Tsuya, and Choe (1998). Research on intergenerational co-residence andcontact in Japan is more common in sociology than in economics. However, sociological research does not test economic
hypotheses and does not consider competing hypotheses.

1anything should happen to them than those in the U.S. and Germany. More than half of the elderly
in Japan hope to co-reside with their children whereas hardly any of those in the U.S. do. Next,
the Comparative Survey on Savings in Japan and the United States (Japan-U.S. Survey) shows the
weakness of altruistic bequest motives and the importance of housing assets as bequeathable wealthin Japan. The proportion of those who plan to leave a bequest to their children no matter what inJapan is less than half of those in the U.S. is. The amount of inheritances in Japan is ﬁve times
as large as those in the U.S. and housing assets comprise 85% of inheritances in Japan. Of those
who own owner-occupied housing, 28% acquire it as a gift or an inheritance in Japan whereas this
proportion is only 7% in the U.S.
Sections 4 and 5 describe the data and empirical strategy. The Survey on Life Planning in theAge of Long Life (SLPALL), which I use in my analysis, is the only available micro data set thatcollects information on intergenerational co-residence, distance between residences, and frequency
of contact in Japan. This survey also collects direct information on the expectations and experienceof receiving gifts and inheritances from one’s parents. Joulfaian and Wilhelm (1994) examine theimpact of inheritance expectations and experiences on labor supply and consumption but do not
analyze bequest motives. I identify the exchange motive and mutual altruism using information
pertaining to expectations concerning inheritances, past and future inheritance experiences fromparents in connection with housing purchase and attitudes toward the care of parents. Moreover,I identify the demonstration eﬀect using the characteristics of grandchildren. Section 6 presents
the empirical ﬁndings. I ﬁnd a strong positive association between inheritance expectations and coresidence and between ﬁnancial assistance from parents and distance/contact. My ﬁndings suggestthat intra-family transfers are consistent with the exchange motive and reinforce the empirical resultsof previous studies that Ricardian equivalence does not hold (Bernheim, Shleifer, and Summers 1985,
and Altonji, Hayashi, and Kotlikoﬀ 1992). Section 7 gives conclusions and implications.

2

Theoretical Background and Empirical Evidence

A. T he Exchange or Strategic Bequest M otive
Becker (1974) shows that money transfers within the family of an altruistic parent will induce
her selﬁsh children to maximize family income. In other words, even selﬁsh children will not takeactions that decrease family income. Thus, a benevolent parent can realize her most preferred2outcome without an elaborate incentive scheme no matter how selﬁsh her children are. However,Bernheim, Shleifer, and Summers (1985) show that Becker’s (1974) celebrated Rotten Kid theorem
will not be valid if there is another interaction − namely, attention from children to parents. In
particular, they show theoretically that an altruistic parent might attempt to elicit more attention
from her children if he/she cares about not only her own consumption and her children’s consumption
but also about attention provided by her children. One possible strategic manipulation is that theparent pre-commits to a rule of bequest division and threatens to disinherit her children if they do
not take care of her. From this point of view, bequests are a quid pro quo for care during old age.
Bernheim, Shleifer, and Summers (1985) ﬁnd empirically that the elderly in multiple-child families
who hold bequeathable wealth elicit more attention from their children in the form of visits andtelephone calls families using U.S. micro data from the Longitudinal Retirement History Survey.
Bernheim, Shleifer, and Summers (1985) and Cox (1985) set up models of the exchange motive.
The parent cares about her own consumption, the attention or services provided by her child, and herchild’s utility, and the child cares about his own consumption and attention he provides to his parent.
The parent’s utility is increasing in her own consumption and attention provided by her child, andthe child’s utility is increasing in his own consumption and decreasing in attention he provides. The
parent decides the consumption amount of each family member, the amount of bequests or inter-vivos
transfers, and the amount of attention so as to maximize her own utility subject to a family budget
constraint and a participation constraint or threat point. The family budget constraint is obtained bysumming the budget constraints of the parent and child and allows money transfers from the parent
to the child (inter-vivos transfers or bequests). The participation constraint expresses the condition
that the child’s utility when he provides attention to his parent and receives a bequest must equal or
exceed the level of his utility when he provides no attention to his parent and receives the minimum
bequest (the bequest he receives when he provides no attention).2 If the parent has two and morechildren, the optimal levels of consumption, bequests, and attention provided by children to theirparent are attained when the participation constraint is binding (Bernheim, Shleifer, and Summers
1985). Alternatively, if the parent has dominant bargaining power, the level of the child’s utility
will equal the level of his utility when his consumption equals his endowment plus the minimum
inter-vivos transfers and he provides no attention (Cox 1987).
The empirical implications of this model are that parental income and wealth will have a positive
2
This model assumes that the incentive constraint is not binding − that is, that the parent succeeds in eliciting
attention from her child without increasing the amount of bequeathable wealth.

3

eﬀect on attention and that ﬁlial income and wealth will have a negative eﬀect on attention. Ifparental income or wealth increases, parents should elicit more attention from their children as longas attention is a normal good because children will provide more attention to their parents in the
expectation of receiving a higher return. A decrease in ﬁlial income or wealth implies a decreasein the price of attention, and thus parents should elicit more attention from their children. In
addition, children should provide more attention to their parents as their probability of receiving an
inheritance increases − that is, children expecting to receive a bequest should be more likely to takecare of their parents. The exchange motive is a falsiﬁable hypothesis as long as there is no substitutefor attention provided by children to their parents in the market.

B. T he Demonstration Ef f ect
Cox and Stark (1995) presume a world in which children imitate their parent’s behavior with someprobability. All members of a family − parent, child, and grandchild − are selﬁsh. Nonetheless,farsighted rational parents (child) provide attention to their grandparents (parent) since they (child)want to set an example for their children (grandchild) concerning the care of parents during old age.
Young children (grandchild) observe their parents (child) taking care of their grandparents (parent),
which provides a reference course of action.3 According to the demonstration-eﬀect hypothesis, even
if individuals (child) are selﬁsh, they (child) will demonstrate devotion to their parents (parent) forthe purpose of eliciting attention from their children (grandchild) in the future.
This ingenious hypothesis proposed by Cox and Stark (1995) has several implications. First,
the presence of grandchildren should positively aﬀect intergenerational transfers from children to
parents. Second, the composition of upstream transfers is important. Visible transfers are much more
eﬀective, and thus in-kind transfers are more eﬀective than cash, and visits are more eﬀective thantelephone calls. Third, individuals with longer life expectancies have more incentive to manipulate
their children’s preferences because the period of time during which they can potentially rely on
their children is longer.4 In general, women have a longer lifespan than men, and wives are younger
than husbands, and thus women should provide more attention to their parents than men.
Moreover, in the case of the demonstration eﬀect, intra-family transfers from children to parents
would be aﬀected by the presence of grandchildren who live with the children to a greater extent than3

Cox and Stark (1995) provide many kinds of persuasive evidence supporting the premise of the demonstrationeﬀect that children imitate their parents’ behavior.
4
See Jellal and Wolﬀ (2000) for a mathematical proof.

4

by the presence of grandchildren who live apart from the children because grandchildren should bebetter able to observe the behavior of children if they live together. Similarly, intra-family transfers
should not be aﬀected by the presence of grandchildren who are too young to observe and remember
their parent’s behavior. Note that the characteristics of grandchildren also aﬀect upstream transfersin the case of the exchange motive. Those who have small children have an incentive to have more
frequent contact with their parents because their parents can help with child rearing and housework.
Cox and Stark (1995) obtain empirical ﬁndings that are consistent with the demonstration-eﬀect
hypothesis using U.S. micro data from the National Survey of Families and Households (NSFH). Oneof their ﬁndings is that those who experienced co-residence with their grandparents in early life tend
to experience temporary or continued co-residence with their parents and have a positive opinion
concerning co-residence with their elderly parents. The other is that those who have a child tend tohave more frequent contact with their parents and to have a higher proportion of visits as comparedwith telephone calls. These ﬁndings bear out the premise and key implication of the demonstrationeﬀect.
Wolﬀ (2001) also ﬁnds a positive eﬀect of the presence of grandchildren on contact with parents
using French micro data. In addition, Wolﬀ (2001) uncovers a hidden relationship − namely, a
positive eﬀect of care of grandchildren by parents on contact with parents. Thus, it appears thatthose with small children live with their parents not in order to provide a role model to their children
but in order to receive assistance with childcare from their parents. In short, Wolﬀ (2001) provides
an alternative explanation of the positive eﬀect of the presence of grandchildren on contact withparents along the lines of the exchange motive rather than the demonstration eﬀect.
Becker and Murphy (2000) present a new model that illustrates the process using the concept ofsocial norms that require children to support their elderly parents. In this model, as in the case of
the demonstration eﬀect, individuals spend resources in order to inculcate their children with social
norms or values and to induce them to provide care and support in old age, but the investment does
not necessarily demonstrate devotion to their parents. The demonstration eﬀect is one of the mosteﬀective ways of inculcating norms into one’s children’s minds, but not the only way.

C. T he Exchange M otive vs. the Demonstration Ef f ect
Cox and Stark (1995) claim that the insightful hypothesis presented by Bernheim, Shleifer, andSummers (1985) does not contain an enforcement mechanism whereas the demonstration-eﬀect hy5

pothesis does. According to the demonstration-eﬀect hypothesis, parents inculcate family norms
into their children’s minds. Implanted monitors (a sense of guilt) play a self-enforcing role. Cox and
Stark (1995) claim that, in the case of the exchange motive, children will take care of their parents
only when their parents have ample ﬁnancial assets, life insurance, or residential properties and thatsuch a monetary mechanism does not work in non-wealthy families. However, even if parents do nothave ample wealth, they can transfer time − for an example, housework, childcare, house sitting,
etc.5
Perozek (1998) reexamines the strategic bequest motive using the 1987 NSFH, whereas Cox and
Stark (1995) use the NSFH conducted between March 1987 and May 1988. It is interesting to notethat Perozek’s results support the strategic bequest motive and thus that the two studies support
diﬀerent hypotheses even though they use approximately the same data. Furthermore, Cox and
Rank (1992) also use the NSFH conducted between March 1987 and May 1988 and conclude thatthe motives for inter-vivos transfers are more consistent with exchange than altruism: the probabilityof net money transfers from parents to children are negatively correlated with ﬁlial earnings, while
the amount of net money transfers from parents to children are positively correlated with ﬁlial
earnings, the frequency of contact by children with parents and in-laws, informal help by children
to parents, and geographic distance used as a proxy for care from children to parents. In addition,
one of the empirical results of Cox and Stark (1995) and Wolﬀ (2001) suggests altruism: parental(imputed permanent) income is negatively correlated with the frequency of contact with parents.
Cox and Stark (1995) do not deny altruism; in fact, they give another explanation for the positiveeﬀect of the presence of grandchildren on contact with parents: altruistic feelings might burgeon
inside of parents (child) by virtue of the presence of children (grandchild).
Altonji, Hayashi, and Kotlikoﬀ (1992) reject the pure altruism that legitimizes the inﬁnite horizon (dynasty) model presented by Barro (1974), but Altonji, Hayashi, and Kotlikoﬀ (1992, 1996)
acknowledge that impure altruism exists despite the inadequate amount of intra-family transfers.
5

Moreover, families in which various interactions are repeated contain an enforcement mechanism ab initio, andin the case of the exchange motive, interactions within a family are repeated, and punishments are possible. Recent
experimental studies on economic transactions have found that reciprocity and fairness are more likely to arise in thecase of non-anonymity and iteration. See Fehr and Gächter (2000), for example. Parents can threaten not to carefor their grandchildren, do housework, or leave a bequest unless their children provide attention, and children canthreaten not to provide attention to their parents unless their parents take care of their children, do housework, or
promise an inheritance. Needless to say, wealthy parents can threaten their children with disinheritance. On the other
hand, in the case of the demonstration eﬀect, interactions within a family are not repeated since intra-family transfers
are upstream unilateral. Thus, the demonstration eﬀect is an imperfect self-enforcing mechanism that relies solely on
individual monitors (a sense of guilt). Therefore, the exchange motive has a more eﬀective enforcement mechanism
than the demonstration eﬀect.

6

Thus, the empirical evidence to date has been mixed, with some support for all three models (thedemonstration eﬀect, exchange motive, and altruistic models).

D. Altruism
The dynasty model (Becker 1974, Barro 1974) assumes unidirectional altruism (parental altruism
toward their children) only, and thus it can explain only intra-family transfers from parents tochildren. In practice, however, children might harbor altruism toward their parents as well. If mutual(bilateral) altruism exists within families, Ricardian equivalence does not hold (Altonji, Hayashi, andKotlikoﬀ 1992). It is extremely diﬃcult to derive empirical implications that distinguish the exchange
motive from mutual altruism and to test them.

E. Evidence f rom Japanese M icro Data
There exist two remarkable papers that analyze intra-family transfers using Japanese micro data
− Hayashi (1997) and Ohtake and Horioka (1994). Hayashi (1997) examines the demand neutrality
hypothesis based on pure altruism using data on Japanese extended families from the 1984 National
Survey of Family Income and Expenditure (Zenkoku Shouhi Jittai Chousa) conducted by the Management and Coordination Agency (Soumu-shou), Japan. Hayashi (1997) shows that the allocationof resources between the two generations aﬀects the food consumption patterns of two-generation
households. As the older generation’s income share increases, expenditures on food items preferredby the old − cereal, seafood, and vegetables − increase while that on eating out (preferred by theyoung) decreases and those on meat and dairy products are not signiﬁcantly aﬀected. These results
violate demand neutrality.
Ohtake and Horioka (1994) examine the impact of the presence of bequest motives on the saving
behavior of the elderly and the impact of bequest motives on upstream intra-family transfers −ﬁnancial support and co-residence − using data on households with a head aged sixty or older fromthe 1986 Basic Survey on the Life of the People (Kokumin Seikatsu Kiso-chousa) conducted by
the Ministry of Welfare (Kousei-shou), Japan. Ohtake and Horioka’s (1994) ﬁrst analysis conﬁrms
the presence of bequest motives in Japan: the presence of children slows the speed of elderly parents’decumulation of their housing assets but not of their ﬁnancial assets. Second, Ohtake and Horioka(1994) examine the determinants of ﬁnancial support from children to parents. They ﬁnd thatthe probability of money transfers is negatively correlated with parental labor income and pension
7

income but that the amount of money transfers is positively correlated with ﬁnancial net worth,which is consistent with the exchange motive. Finally, Ohtake and Horioka (1994) test the strategic
bequest motive using data on co-residence. They ﬁnd that the elderly who have more housing assets
are more likely to live with their children, which supports the strategic bequest motive.
Hayashi (1997) analyzes the determinants of money transfers received and co-residence for the
young aged twenty-ﬁve to ﬁfty-four years old and the old ﬁfty-ﬁve years old or older. He ﬁnds thatmoney transfers received and co-residence are negatively correlated with labor income and pension
income for the old, contrary to Ohtake and Horioka (1994). These results favor altruism.
One diﬀerence between the two studies is in the deﬁnition of co-residence. Hayashi (1997) uses
the full sample of households when analyzing the determinants of co-residence whereas Ohtake
and Horioka (1994) use the sample of non-coresident and quasi-coresident households (households inwhich parents and children live together but maintain separate accounts) in order to use informationon the economic status of individual family members living in extended families. Another related
diﬀerence is that Hayashi (1997) does not include wealth in his explanatory variables whereas Ohtake
and Horioka (1994) do.

3

Cultural Background

Intra-family transfers and bequeathable wealth in Japan have many unique features. I clarify theuniquely Japanese features by showing the cultural diﬀerences between the U.S. and Japan using two
international comparative surveys, and ﬁnally, I brieﬂy describe the legal and institutional featuresin Japan.

A. T he International Comparative Survey on the Lives and Attitudes of the Elderly
The International Comparative Survey on the Lives and Attitudes of the Elderly (ICSLAE)(Kourei-sha no Seikatsu to Ishiki ni kansuru Kokusai Hikaku Chousa) has been conducted
every ﬁve years since 1981 by the Management and Coordination Agency (Soumu-shou), Japan.
The ICSLAE surveyed individuals aged sixty and older in the U.S., Japan, Germany, South Korea,
and Thailand in 1996, and obtained 998, 1,183, 1,000, 1,004, and 1,030 responses, respectively. The
response rate was 76.8% in Japan. This survey collects internationally comparative data on parent/child co-residence, the distance between the residences of parents and children, the frequency of8contact between parents and children, and attitudes toward the family and reports some interesting
facts (Oﬃce for Policy on the Aging of Society 1997).
First, the co-residence rate of the elderly, deﬁned as the share of elderly individuals not living
alone or as a couple, is 58.8% for men and 62.7% for women in Japan and 22.8% for men and 26.3%
for women in the U.S. Thus, the co-residence rate of the elderly is much higher in Japan than it isin the U.S. The co-residence rate of the elderly decreases with age in the U.S. but increases with age
in Japan. Elderly women are more likely to co-reside than elderly men in both the U.S. and Japan.
The proportion of the elderly who live within ten minutes of their children is 34.4% in the U.S. vs.
20.3% in Japan. The distance between the residences of the elderly and their children aﬀects thefrequency of contact between them. 40.8% and 50.8% of the elderly who live within ten minutesof their children’s residence see their children almost every day in the U.S. and Japan, respectively.
On the other hand, 25.0% and 17.8% of the elderly who live more than three hours away from theirchildren hardly ever see their children in the U.S. and Japan, respectively. I analyze the determinantsof co-residence, distance, and contact between parents and children in terms of bequest motives insubsequent sections.
Second, the elderly in the U.S. expect close friends to help out if and when anything should
happen to them to a greater extent than in Japan: 18.1% in the U.S. vs. 2.0% in Japan in the caseof disease, 29.8% in the U.S. vs. 17.2% in Japan in the case of anxiety or trouble, 12.1% in the
U.S. vs. 3.2% in Japan in the case of economic hardship. By contrast, the elderly in Japan rely on
their spouses, children, and relatives to a greater extent than those in the U.S. if and when anythingshould happen to them. Furthermore, the elderly in Japan would like to see other family members
more frequently than those in the U.S.: the proportion of the elderly who would like to live with
their children or grandchildren is 4.0% in the U.S. vs. 54.2% in Japan, and the proportion of theelderly who would sometimes like to have a meal or conversation with their children or grandchildren
is 38.0% in the U.S. vs. 72.6% in Japan. These facts suggest that the elderly’s demand for attention
provided by children is much higher in Japan than in the U.S.

B. T he Comparative Survey on Savings in Japan and the U nited States
The Comparative Survey on Savings in Japan and the United States (Japan-U.S. Survey) (Chochiku
ni kansuru N ichibei Hikaku Chousa), was conducted simultaneously in the U.S. and Japan in 1996
by the Ministry of Posts and Telecommunications (Y uusei-shou) Japan. The Japan-U.S. Survey
9

surveyed households with a head who is twenty years old or older in the U.S. and Japan and obtained
1,243 and 1,508 responses, respectively. The response rate was 68.5% in the U.S. and 69.1% in Japan.
This survey collects comparative data on bequest motives, bequest division, homeownership, andinherited assets for the U.S. and Japan (Institute for Posts and Telecommunications Policy 1997).
In some respects, the nature of bequest motives is diﬀerent between the U.S. and Japan. The
proportion of those who (a) plan to leave a bequest to their children if their children take care ofthem is 3.2% in the U.S. vs. 5.2% in Japan, the proportion of those who (b) plan to leave a bequest
to their children no matter what is 39.9% in the U.S. vs. 15.6% in Japan, the proportion of thosewho (c) do not plan to make any special eﬀorts to leave a bequest to their children but will leavebehind whatever happens to be left over is 47.9% in the U.S. vs. 56.0% in Japan, the proportion of
those who (d) do not plan to leave a bequest is 2.7% in the U.S. vs. 4.0% in Japan, and those who (e)do not know or have never given it thought is 6.3% in the U.S. vs. 19.2% in Japan. The proportionof those who select (b) is twice as high in the U.S. as it is in Japan. Thus, Americans have a muchstronger bequest motive than the Japanese. The proportions of those who select (a), (c), or (d) are
greater in Japan than they are in the U.S. Thus, the bequest motives of the Japanese are selﬁsh or
strategic compared with Americans.6 The proportion of those who select (a) increases with age inJapan: 11.8% for those aged seventy and older vs. 2.4% for those who are in the twenties.
Owner-occupied housing is very important as bequeathable wealth in Japan. The proportionof homeownership is similar in the two countries (64.7% in the U.S. vs. 62.8% in Japan),7 but themethods for acquiring housing assets are very diﬀerent: 92.7% acquire housing assets by oneself
and 5.8% acquire housing assets as a gift or an inheritance in the U.S., while the corresponding
proportions are 65.8% and 28.0%, respectively, in Japan. The homeownership rate dramaticallyincreases with age in Japan (10.8% in one’s twenties to 83.6% in one’s eighties) whereas it gradually
increases with age until one’s ﬁfties (39.5% in one’s twenties to 79.0% in one’s ﬁfties) and decreases
thereafter in the U.S (59.9% in one’s eighties). The average market value of real estate is higher
in Japan than it is in the U.S.: 48.87 million yen in Japan vs. 16.81 million yen (converted using
an exchange rate of 1 dollar = 110 yen) in the U.S. The proportion of respondents who received
inheritance diﬀers little in the two countries (29.1%, in the U.S. vs. 22.3% in Japan), but thecomposition and average market value of inherited assets are very diﬀerent. In the U.S., inheritancesconsist mostly of ﬁnancial assets and other assets excluding real estate: 16.7% receive residential
6
7

See Horioka (2002) for a detailed discussion of bequest motives and division in the U.S. and Japan.
The proportion of detached houses including land is 61.8% in the U.S. and 53.1% in Japan.

10

structures, 17.4% receive residential land, 14.8% receive structures or land other than residential
properties, 24.3% receive real assets, 88.0% receive ﬁnancial assets, and 97.1% receive other assets,
and 16.3% of the value of bequests consists of residential structures, 8.1% consists of residential
land, 38.7% consists of structures or land other than residential properties, 1.6% consists of real
assets, 8.2% consists of ﬁnancial assets, and 26.8% consists of other assets. On the other hand,in Japan, inheritances consist mostly of structures and land: 59.1% receive residential structures,
85.0% receive residential land, 19.9% receive structures or land other than residential properties,
3.8% receive real assets, 23.7% receive ﬁnancial assets and 1.7% receive other assets, and 4.6% of thevalue of bequests consists of residential structures, 23.7% consists of residential land, 56.8% consistsof structures or land other than residential properties, 4.9% consists of real assets and 9.8% consistsof ﬁnancial assets.8 The average market value of inherited assets is higher in Japan than in the
U.S. regardless of the kind of property: the average market value of all inherited assets is 10.89
million yen in the U.S. vs. 55.21 million yen in Japan. Furthermore, the purchase of housing assets
is the dominant motive for household loans in both the U.S. and Japan. More than 70% of indebted
households have housing- or land-related debt in both the U.S. and Japan,9 but the average amountof housing- or land-related debt is very diﬀerent in the two countries − 7.45 million yen in the U.S.
vs. 17.78 million yen in Japan.

C. Institutional Background
These diﬀerences between the two countries might reﬂect diﬀerences in the legal and tax systems.
Bequests are divided according to the decedent’s will in both the U.S. and Japan except that eachchild is guaranteed a minimum share in Japan; in other words, it is not possible to disinherit a childcompletely in Japan. In the absence of wills, bequests are divided equally for each child in bothcountries. In practice, however, the voluntary forfeiture is common in Japan, which is evidence ofthe discretionary distribution of bequests.10 The gift tax is far heavier than the inheritance tax inJapan, with the exception of parental assistance with housing purchase. Thus, tax avoidance via
inter-vivos transfers is more diﬃcult in Japan than it is in the U.S.11

8

This survey does not collect information on the average value of other assets in Japan.
The proportion of indebted households is 58.6% in the U.S. vs. 36.2% in Japan.
10
According to the survey on inheritances conducted in 1989 and 1991 by the Japan Institute of Life Insurance, theproportion of respondents who forfeited their right of inheritances even though their father left a bequest was 51.4%
in the Tokyo metropolitan area and 28.6% in Yamagata prefecture (Noguchi 1992).
11
See Barthold and Ito (1992) for a detailed US-Japan comparison of gift and estate (inheritance) tax systems.
9

11

4

Data

In this paper, I use Japanese micro data from the Survey on Life Planning in the Age of Long Life(SLPALL) (Chouju Jidai no Seikatsu Sekkei) conducted between June 24th and July 6th, 1992, by
the Japan Institute of Life Insurance (N ihon Seimei Bunka Sentah). The SLPALL surveyed 3,500
randomly selected individuals aged twenty and older from throughout Japan and obtained 2,804
responses. The SLPALL collects information on with whom respondents live, the frequency of faceto-face contact with parents and in-laws, age, occupation, the work status of both spouses, economic
status, children, current housing, whose funds were spent to purchase the respondent’s current home,
expected homeownership status twenty years from now, the expectation of inheriting a home, andattitudes toward inheritance. The SLPALL collects information on the following aspects of economic
status: respondent’s own income, household income, household ﬁnancial assets, and whether or not
the household has housing loans outstanding but not on each family member’s share of householdincome and ﬁnancial assets in co-resident households. Section 6 and Table 1 give the deﬁnitions of
the dependent and explanatory variables used in the estimation, respectively.
Adopting Bernheim, Shleifer, and Summers’ terminology, I explore the demand for bequests
whereas Bernheim, Shleifer, and Summers (1985) explore the supply thereof. Our empirical strategy
is to analyze the determinants of attention that respondents (referred to as child) provide to theirparents (referred to as parent). The absence of information on parental characteristics such as
education, health, and wealth is the major limitation of the SLPALL, but the SLPALL collects
information on respondents’ expectation of inheriting a home and attitudes toward inheritance.
Their expectation of receiving an inheritance from their parents sheds light on the strategic bequest
motive, and we can analyze distinguish between the strategic bequest motive and mutual altruism
as motives for intra-family transfers using interacting other variables with it.
More speciﬁcally, I ﬁrst assess whether or not respondents expect to receive an inheritance using
the following question: “Do you plan to live in your own owner-occupied house twenty years fromnow? If you plan to live in your own owner-occupied house, how do you plan to obtain it?” Fiveanswers are given: (a) gift or inheritance from your parents, (b) your own funds and ﬁnancial
assistance from your parents, (c) only your own funds, (d) already live in your own owner-occupied
house, and (e) other. I classify (a) as inheritance expectations, and (b) as parental assistance
expectations. Next, I assess whether or not respondents received a gift or inheritance from theirparents using the following question: “If you live in a owner-occupied house, who is the owner of12

it and how did you obtain it (including residential land) if you are the owner?” Five answers are
given: (a) parents, (b) children, (c) bought with my own and spouse’s funds, (d) acquired it as gift
or inheritance from parents or received parental ﬁnancial assistance, and (e) other. I classify (d) as
inheritance experience. Finally, I distinguish the strategic bequest motive from mutual altruism
using the following question: “Would you like to take care of your aged parents even if you do not
expect an inheritance from your parents?” Five choices are given: (a) yes, (b) if anything yes, (c)yes and no, (d) if anything no, and (e) no. I classify (a) as altruism, and (b), (c), (d), and (e) as
exchange motive. I do not classify (b) as altruism because those who select (b) do not deﬁnitely
plan to take care of their parents if they do not expect an inheritance and because it is diﬃcult toanswer “no” to such a question given traditional Japanese values.12
The availability of direct information on the expectation and experience of receiving a gift orinheritance and on altruistic feelings toward one’s parents is the most important advantage of the
SLPALL. The tests for bequest motives in previous studies are based on the correlation between
the beneﬁciary’s economic status and intra-family transfers.13 However, the drawback of this kindof test is that economic status such as income and wealth might be correlated with the degree of
altruism. For example, the bequeathable wealth of the elderly might possibly be directly correlatedwith the degree of ﬁlial altruism and might also be indirectly correlated with the degree of ﬁlial
altruism through portfolio selection that reﬂects the degree of time preference, risk aversion, andparental altruism. Even Bernheim, Shleifer, and Summers’ (1985) result that attention provided bychildren is positively correlated with parental bequeathable wealth in multiple-child families but notin single-child families can be consistent with dual altruism since children with siblings might be
altruistic whereas children raised as a single child might be selﬁsh. Thus, it is very important to use
direct information on gifts and inheritances and to control for the degree of ﬁlial altruism when we
examine the determinants of co-residence, distance, and contact between parents and children.
After eliminating observations that have missing values, inconsistent responses, the unemployed,
the divorced, and those for whom both parents and both parents-in-law have passed away, 1,221
observations remain. Table 2 shows sample means for the married and the unmarried. 90% of
the unmarried live with their parents. The married have greater opportunity for contact with
12
Among the 943 married respondents, 31.9% of respondents selected (a) yes, 43.1% selected (b) if anything yes,
19.7% selected (c) yes and no, 3.1% selected (d) if anything no, and 2.1% selected (e) no. If I classify (b) not as
exchange motive but as altruism, the estimation results are the same concerning co-residence and roughly the same
concerning the distance between residences and the frequency of contact.
13
One exception is Altonji, Hayashi, and Kotlikoﬀ (1992) who control for unobservable individual (dynasty) heterogeneity by estimating the consumption function after a ﬁrst-diﬀerencing transformation.

13

parents than the unmarried because they have parents-in-law, and there are also some diﬀerencesin unobservable characteristics between the married and the unmarried. In addition, almost no
unmarried individuals have children in Japan, and the SLPALL does not ask unmarried respondents
whether or not they have children. Thus, I focus on the 943 married respondents in the subsequent
analysis whereas Cox and Stark (1995) and Wolﬀ (2001) include unmarried as well as married
respondents in the sample they used for their regression analysis. Table 3 shows sample means formarried respondents who co-reside with their parents and those who live apart from their parents.
Table 4 shows the summary statistics for the married respondents. Their average age is 36, which
is appropriate for testing the exchange motive and the demonstration eﬀect.14 If the sample is biased
toward the young, the positive correlation between the presence of grandchildren and co-residenceor contact with parents is likely to reﬂect an exchange motive because their children are also young
in the case of young couples. The average age of the sample used by Wolﬀ (2001) is 26.5 years old.
Moreover, I distinguish between the two selﬁsh hypothesis using the characteristics of grandchildrenthat are closely related to the cost of child rearing and the visibility of parental behavior such as theage of the grandchildren, the employment status of the mother, and living arrangements.

5

Estimation Methods

The model I estimate is of the form:A∗i = xi β + ui ,where A∗i represents an individual i’s propensity to provide attention, help, respect, or visits to one’s
parents, xi represents a k × n observable vector where k = the number of explanatory variables
and n = the number of observations, β represents a k × 1 estimated vector, and ui represents anunobservable error term. This estimation equation can be interpreted as a linear approximationof the participation constraint. We are not able to observe the individual’s level of altruism eventhough the levels of ﬁlial altruism and parental altruism within families will aﬀect the values ofboth dependent variables and some of the explanatory variables. Even if I could control for the
14

The age distribution of the SLPALL sample is similar to those of the October and November 1992 issues ofthe M onthly Report on Current P opulation Estimates, which is conducted by the Management and Coordination
Agency, Japan, except that respondents who are aged twenty to twenty-four years old or seventy-ﬁve years old or older
are slightly underrepresented.

14

individual’s level of ﬁlial altruism, parental altruism will bias the estimators if correlated with bothA∗ and x. Table 1 gives the deﬁnitions of all explanatory variables, and Table 4 shows their summary
statistics. I utilize three measures of A∗ and three estimation models.
First, I utilize a binary response model as follows:Ri∗ = xi β1 + u1i ,Ri∗ = 1

if R∗ > 0,

= 0otherwise,(1)

where R∗ represents an individual or married couple i’s propensity to co-reside with their parents,
and u1i has a normal distribution with mean zero and variance one. An alternative interpretation isthat Ri∗ = 1 if the level of approximate linear indirect utility when one co-resides with one’s parents
exceeds that when one lives apart from one’s parents and Ri∗ = 0 otherwise.
Second, I utilize an ordered response model as follows:Di∗ = xi β2 + u2i ,Di∗ = 1

if Di∗ ≤ 0,

= 2

if 0 ≤ Di∗ < d1 ,= 3

if d1 ≤ Di∗ < d2 ,= 4

if d2 ≤ Di∗ < d3 ,= 5

if Di∗ < d4 ,(2)

where Di∗ represents an individual or married couple i’s propensity to live close to their parents, u2i
has a normal distribution with mean zero and variance one, and dj is a latent parameter for j = 1, 2,
3, 4. I deﬁne geographic distance between an individual or married couple’s own residence and theirparents’ residence as follows: too far to go and return in one day = 1, close enough that one can go
and return in one day = 2, one hour one way by car, bus, or train = 3, within walking distance =4, and adjacent = 5. I focus on married couples who live apart from both sets of parents.15

15

I also deﬁne co-residence = 6 and examine the determinants of distance between respondents’ residence and thatof their parents. The signs and statistical signiﬁcance of the estimated coeﬃcients are the same as those of a probit
regression analysis of co-residence with parents or in-laws except that the coeﬃcient of inheritance experience becomes
positive and statistically signiﬁcant.

15

Third, I utilize a truncated regression model as follows:Ci∗ = xi β3 + u3i ,Ci∗ = 0= Ci∗

if Ci∗ ≤ 0,(3)

if 0 < Ci∗ < cmax ,where Ci∗ represents an individual or married couple i’s frequency of contact with parents and u3i
has a normal distribution with mean zero and variance σ 2 . I quantify contact as follows: almost
daily = 300, once a week or more = 100, once a month or more = 24, three to four times a year
= 3.5, about once a year = 1, and almost never = 0.16 Hence, cmax equals 300 when I use contact
with the husband’s parents and 600 when I use contact with both sets of parents.17 I focus on
married couples who live apart from both sets of parents. Table 5 shows the summary statistics ofthe dependent variables.

6

Estimation Results

This section presents the estimation results of models (1), (2), and (3). The results are shownin Tables 5 through 14. Tables 5 through 9 show the estimation results for the determinants ofintergenerational co-residence, distance between residences, and frequency of contact. Column 1
shows the result of a simple speciﬁcation. Columns 2 through 6 identify mutual altruism and theexchange motive using the speciﬁc questions about inheritance expectations and attitudes toward
the care of parents and show the results for ﬁve speciﬁcations of grandchildren’s characteristics.
Tables 10 through 14 show robustness checks using the basic speciﬁcation of column 2 in Tables 5through 9. More speciﬁcally, I estimate the basic speciﬁcation for the subsample of males, that offemales, that of those who live close to their parents and in-laws, that of those who live far fromtheir parents and in-laws, and that of those who are forty and older.

16
Cox and Rank (1992) and Cox and Stark (1995) quantify contact as follows: several times a week = 100, about
once a week = 52, one to three times a month = 24, several times a year = 6, about once a year = 1, and not at all= 0 and then aggregate across parents and in-laws. Bernheim, Shleifer, and Summers (1985) qualify attention V asfollows: V = (4 · the number of children who visit or telephone their parents weekly + the number of children who
visit or telephone their parents monthly) / (4 · the number of children). V measures contact per child and takes avalue between 0 and 1 by deﬁnition.
17
I also deﬁne co-residence = cmax and examine the determinants of frequency of contact between respondents andrespondents’ parents. The signs and statistical signiﬁcance of the estimated coeﬃcients are the same as those of a
probit regression analysis of co-residence with parents or in-laws except that the coeﬃcient of inheritance expectations
becomes highly statistically signiﬁcant.

16

A. Co − residence
Table 5 shows the results of a probit regression analysis of co-residence with parents or in-laws. I
obtain several results that are consistent with the exchange motive, but almost no results support
the demonstration eﬀect. First, inheritance expectations have a positive impact on co-residence
when entered in isolation, which is consistent with Ohtake and Horioka’s (1994) result that theprobability of co-residence is positively correlated with the amount of housing assets. Inheritance
expectations are positively associated with co-residence even after ﬁlial altruism is controlled for.
When inheritance expectations are interacted with the altruism and exchange motive dummies,
the magnitude of the coeﬃcient of the interactive term between inheritance expectations and thealtruism dummy is smaller than that of the coeﬃcient of inheritance expectations when enteredin isolation, while that of the coeﬃcient of the interactive term between inheritance expectations
and the exchange motive dummy is larger, meaning that inheritance expectations aﬀect those withan exchange motive more strongly than altruistic individuals. Both coeﬃcients are statisticallysigniﬁcant at the 1% level. Second, ﬁlial income has a negative impact on co-residence. Third, ﬁlial
housing loans have a positive impact. Since a decrease in ﬁlial income and wealth implies a decreasein the opportunity cost to children of providing attention to their parents, parents can elicit more
attention from their children when ﬁlial income and wealth decrease. These two results can also
be interpreted as implying that co-residence is an inferior good, as Hayashi (1997) points out. In
addition, the dual earner dummy has a positive impact on co-residence, which is consistent withHayashi’s (1997) result that the working wife dummy has a positive impact on co-residence andmight also be interpreted as being consistent with the exchange motive. Since childcare facilities are
inadequate in Japan, parental cooperation is very important for women who work after marriage andchildbirth, and living with one’s parents facilitates parental help with housework and child rearing.
Finally, the presence of grandchildren has no impact on co-residence overall, but the presenceof pre-nursery school aged grandchildren has a positive and statistically signiﬁcant impact on coresidence in the case of double-income couples. This result is consistent with the exchange motive
because pre-nursery school aged children require more care than older children, meaning that the
beneﬁts of co-residence are higher, but is inconsistent with the demonstration eﬀect because prenursery school aged children are presumably too young to observe and remember their parents’behavior. The number of grandchildren has a positive and statistically signiﬁcant impact on coresidence, which is consistent with Hayashi’s (1997) result that the number of non-adult children
17has a positive impact on co-residence. This ﬁnding is consistent not only with the exchange motive
but also with the demonstration eﬀect because, as the number of children increases, not only will thecost of child rearing increase but also the expected return from the demonstration eﬀect. However,according to the demonstration eﬀect, the impact of the presence of grandchildren should also havea positive and statistically signiﬁcant.
Table 5 shows the estimated marginal eﬀects of each factor on the probability of co-residencewith parents or in-laws. I ﬁnd that inheritance expectations have the greatest impact and thatthe coeﬃcients of the interactive term between inheritance expectations and the exchange motive
dummy is larger than that with the altruism dummy by 15%. These results suggest that strategic
children respond to their parent’s signal of inheritance or the threat of disinheritance more sensitively
than altruistic children do. The dual earner dummy and the presence of pre-nursery school aged
grandchildren in double income couples also have a substantial impact on co-residence.

B. Distance
Table 6 shows the results of an ordered probit regression analysis of the distance between the
respondent’s residence and that of the parents who live closer to the respondent. I obtain three
results that are consistent with the exchange motive but no results that support the demonstrationeﬀect. First, inheritance expectations have a positive impact on distance, but when inheritance
expectations are interacted with the altruism and exchange motive dummies, the coeﬃcients of
the interactive terms are not statistically signiﬁcant. Second, inheritance experience has a positive
impact on distance. Parents are more likely to provide ﬁnancial assistance to their children the closer
to the parents’ residence is the house their children purchase. Third, ﬁlial income has a negative
impact on distance. On the other hand, the impact of the presence of grandchildren is negative andstatistically insigniﬁcant.
Table 7 shows the results of ordered probit regression analysis on distance between the respondent’s residence and that of the husband’s parents. I obtain three results that are consistent withthe exchange motive but no results that support the demonstration eﬀect. First, inheritance expectations have a positive impact on distance. When inheritance expectations are interacted with thealtruism and exchange motive dummies, the magnitude of the coeﬃcient of the interactive term
between inheritance expectations and the altruism dummy is smaller than that of the coeﬃcientof inheritance expectations when entered in isolation, while that of the coeﬃcient of the interactive
18

term between inheritance expectations and the exchange motive dummy is larger. The former isstatistically signiﬁcant at the 10% level, while the latter is statistically signiﬁcant at the 1% level. In
other words, inheritance expectations are positively associated with co-residence after ﬁlial altruism
is controlled for. Second, inheritance experience has a positive impact on distance. Third, ﬁlial
income has a negative impact. On the other hand, the impact of the presence of grandchildren is
not statistically signiﬁcant.

C. Contact
Table 8 shows the results of a Tobit regression analysis of the frequency of contact with parents orparents-in-laws. I obtain a result that consistent with the exchange motive namely, that inheritanceexperience has a positive impact on the frequency of contact, and a result that is inconsistent withthe demonstration eﬀect namely, that the impact of the presence of grandchildren is negative andstatistically insigniﬁcant.
Table 9 shows the results of Tobit regression analysis of the frequency of contact with the husband’s parents. The estimation results are similar to those in Table 7. I obtain three results thatare consistent with the exchange motive but no results that support the demonstration eﬀect. First,
inheritance expectations have a positive impact on the frequency of contact. When inheritance
expectations are interacted with the altruism and exchange motive dummies, the magnitude of
the coeﬃcient of the interactive term between inheritance expectations and the altruism dummy
is smaller than that of the coeﬃcient of inheritance expectations when entered in isolation, whilethat of the coeﬃcient of the interactive term between inheritance expectations and the exchange
motive dummy is larger. The former is statistically signiﬁcant at the 10% level, and the latter isstatistically signiﬁcant at the 5% level. Second, inheritance experience has a positive impact. Third,
ﬁlial income has a negative impact. On the other hand, the impact of the presence of grandchildren
is negative and statistically insigniﬁcant, while the impact of the presence of grandchildren living
apart from children is positive and statistically signiﬁcant. These ﬁndings thereon are hostile to thedemonstration eﬀect.

D. Robustness Checks
Table 10 shows the robustness checks of the results in Table 5 concerning co-residence. The signsof the coeﬃcients for the ten subsamples, as shown in columns 2 through 11, are approximately
19the same as those for the full sample, as shown in column 1.18 The relative magnitude of thecoeﬃcients of inheritance expectations is also roughly the same even if observations that live far
from both their parents and in-laws are excluded, as shown in columns 4 through 6, and even when
the sample is conﬁned to those are forty and older, as shown in column 9, but diﬀerent between
males and females, which can be seen by comparing columns 2 and 3, columns 7 and 8, and columns
10 and 11. In columns 2 and 7, which show the results for the male subsample, the impact ofinheritance expectations is approximately the same in the case of altruistic individuals as in thecase of those with an exchange motive, and in column 10, which shows the result for the forty andolder subsample of males, the impact of inheritance expectations is greater in the case of altruistic
individuals than in the case of those with an exchange motive. By contrast, in columns 3 and8, which show the results for the female subsample, the impact of inheritance expectations is far
greater in the case of those with an exchange motive than in the case of altruistic individuals, andin column 11, which shows the result for the forty and older subsample of females, the inheritance
expectations is statistically signiﬁcant in the case of those who with an exchange motive but not in
the case of altruistic individuals. These results suggest that males respond similarly to the threatof disinheritance whether they are altruistic or strategic and that strategic females respond to thethreat of disinheritance more than twice as strongly as altruistic females do.
Table 11 shows the robustness checks of the results in Table 6 concerning distance between the
respondent’s residence and the parents who live closer to respondent. When the sample is stratiﬁed
by gender, inheritance experience has a statistically signiﬁcant impact on the frequency of contact
in the female subsample, as shown in columns 3 and 11, but not in the male subsample, as shownin columns 2, 6, and 10.
Table 12 shows the robustness checks for the results in Table 7 concerning distance between the
respondent’s residence and that of the husband’s parents. The impact of inheritance experience
remains positive and statistically signiﬁcant in various subsamples, and the impact of inheritance
expectations remains positive and statistically signiﬁcant in the case of those with an exchange
motive even when respondents who live far from their parents and in-laws are excluded or when
respondents who live close to their parents or in-laws are excluded as shown in columns 4, 5, and
8. When the sample is stratiﬁed by gender, the impact of inheritance expectations is statisticallysigniﬁcant in the case of those with an exchange motive but not in the case of altruistic individuals
18

The impact of income remains statistically signiﬁcant in the male subsample but not in the female subsample.

20

in the female subsamples, as shown in columns 3, 7, and 11, whereas it is positive but statisticallyinsigniﬁcant in the male subsamples, as shown in columns 2, 6, and 10.
Table 13 shows the robustness checks for the results in Table 8 concerning the frequency of contact
with parents or in-laws. The impact of inheritance experience remains positive and statisticallysigniﬁcant in various subsamples. The impact of expected inheritance experience is positive andstatistically signiﬁcant in the male subsamples as shown in columns 2, 6, and 10, which favors theexchange motive.
Table 14 shows the robustness checks for the results in Table 9 concerning contact with thehusband’s parents. The impact of inheritance experience remains positive and statistically signiﬁcantin various subsamples, and the impact of inheritance expectations remains positive and statisticallysigniﬁcant in the case of those with an exchange motive even when respondents who live far fromtheir parents and in-laws are excluded or when respondents who live close to their parents or in-laws
are excluded as shown in columns 4, 5, 8, and 9. When the sample is stratiﬁed by gender, theimpact of inheritance expectations is statistically signiﬁcant in the case of those with an exchange
motive but not in the case of altruistic individuals in the female subsamples, as shown in columns 3,
7, and 11, whereas it is positive but statistically insigniﬁcant in the male subsamples, as shown incolumns 2, 6, and 10. Conversely, the impact of inheritance expectations is positive and statisticallysigniﬁcant in the case of altruistic individuals but not in the case of those with an exchange motive inthe forty and older subsample, as shown in column 12, which favors mutual altruism. The impact ofinheritance experience and that of expected parental assistance is positive and statistically signiﬁcantin the male subsamples as shown in columns 2, 6, and 10.
As we seen in Tables 10 through 14, the impact of inheritance expectations is greater andstatistically more signiﬁcant in the case of those with an exchange motive than in the case ofaltruistic individuals in the female subsamples whereas the opposite result is obtained in the malesubsamples, regardless of the dependent variable used. Three interpretations of these results are
possible. First, the simplest interpretation is that females behave more strategically than males do.
Second, it could be that females have greater expectations of receiving a return from their parentsin-law than males do since in Japan it is typically the daughter-in-law who plays a central role in thecare of parents. My results might be consistent with the strategic bequest motive. Finally, married
men tend to co-reside with their own parents whereas married women tend to co-reside with their21parents-in-law.19 It is more natural for individuals to provide attention to their own parents ascompared to their parents-in-law, either simply because children are more likely to harbor altruistic
feelings toward their own parents or because children are more indebted to their own parents. If so,
the exchange model should be more likely to apply to females in a patrilineal society such as Japan.
Note, however, that the decision about how much attention to provide to one’s parents is made notby individuals but by couples, and thus one’s parent’s threat of disinheritance should be eﬀective
for husbands through bargaining between couples.

E. Summary
I obtain several kinds of evidence in support of the exchange motive in my analysis of co-residence,and the results are robust, holding for the full sample as well as for various subsamples. Inheritance
expectations aﬀect the probability of co-residence, after ﬁlial altruism has been controlled for, evenin the subsample conﬁned to those who live within walking distance of their parents or in-laws. I
also obtain several kinds of evidence in support of the exchange motive in my analysis of distanceand contact even if respondents who co-reside with parents or in-laws are excluded, and the results
are robust, holding for most subsamples. Inheritance expectations and inheritance experience aﬀect
the distance between residences as well as the frequency of contact. In the forty and older subsample
of females, the impact of inheritance expectations on co-residence is greater and highly signiﬁcantin the case of those who with an exchange motive but negative and insigniﬁcant in the case ofaltruistic individuals. As discussed above, the diﬀerence between the results for the male and female
subsamples can be also interpreted as being consistent with the exchange motive. No support isfound for the demonstration eﬀect in my analyses of co-residence, distance, and contact.

7

Concluding Remarks

In this paper, I ﬁnd that intergenerational co-residence, distance between residences, and frequency ofcontact is consistent with the exchange motive. These ﬁndings seem to be at variance with common
sense: the Japanese often feel guilty about not living with their parents, and intergenerational
co-residence is regarded as a virtue in terms of traditional morals persisting in Japan. Expressed
19

Among males who co-reside with their parents or in-laws, 80% males co-reside with their own parents, 28% males
co-reside with their parents-in-law, and 8% males co-reside with both their parents and in-laws. On the contrary,among females who co-reside with their parents or in-laws, 28% females co-reside with their own parents, 80% females
co-reside with their parents-in-law, and 8% females co-reside with both their parents and in-laws.

22

in another way, co-residence arising from the exchange motive is, in eﬀect, a system of reciprocal
assistance.20 Exchange within families involves a strict enforcement mechanism, and the far-sighted
rationality that the demonstration eﬀect requires is probably unreasonable. Inasmuch as intrafamily transfers from children to parents are based not on altruism but on an exchange motive,
the Samaritan’s dilemma does not arise − that is, the elderly do not undersave stemming from theexpectation of receiving ﬁnancial assistance from their altruistic children in old age. The high saving
rate, especially of the elderly, in Japan is consistent with this interpretation.
Japan’s social security is essentially a pay-as-you-go system, which entails unilateral upstream
income redistribution. Its structure is parallel to the demonstration eﬀect. At present, a large
number of people do not contribute to the public pension system, and this problem is becoming
severe. This suggests that the demonstration eﬀect does not apply to household behavior in Japan. In
the case of the demonstration eﬀect, public income redistributions from younger to older generations
such as a pay-as-you-go social security system or a long-term care insurance system will crowd out
intra-family transfers since individuals can receive public assistance in old age even if they do notprovide attention to their parents. However, in the case of the exchange motive, the introduction or
reinforcement of such public income redistribution systems will not crowd out intra-family transfersin the short term. A pay-as-you-go social security system should not aﬀect children’s behavior sincesocial security beneﬁts are not a bequeathable asset.

References
Altonji, J. G., Hayashi, F., Kotlikoﬀ, L. J., “Is the Extended Family Altruistically Linked? Direct
Tests Using Micro Data,” American Economic Review, Vol. 82, No. 5 (December, 1992), 11771198.
Altonji, J. G., Hayashi, F., Kotlikoﬀ, L. J., “The Eﬀects of Income and Wealth on Time and Money
Transfers between Parents and Children,” N ational Bureau of Economic Research W orking
P aper, No. 5522 (April, 1996).

20
Fehr and Gächter (2000, page 160, line 33) state that “Reciprocity is fundamentally diﬀerent from “cooperative”
or “retaliatory” behavior in repeated interactions. These behaviors arise because actors expect future material beneﬁts
from their actions; in the case of reciprocity the actor is responding to friendly or hostile actions even if no material
gains can be expected. Reciprocity is also fundamentally diﬀerent from altruism. Altruism is a form of unconditional
kindness; that is altruism given does not emerge as a response to altruism received. Again, reciprocity is an in-kind
response to beneﬁcial or harmful acts.”

23

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F amilies and Groups (Oscar M orgenstern M emorial Lectures), (Cambridge, the United
Kingdom: Cambridge University Press, 1995), 48-85.
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Economic P erspectives, Vol. 14, No. 3 (Summer, 2000), 159-181.
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Curves,” in Fumio Hayashi, U nderstanding saving: Evidence f rom the U nited States andJapan (Cambridge and London: MIT Press, 1997), 209-239.

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Horioka, C. Y., “Are the Japanese Selﬁsh, Altruistic, or Dynastic?,” Japanese Economic Review,Vol. 53, No. 1 (March, 2002), 26-54.
Institute for Posts and Telecommunications Policy, “Chochiku ni kansuru N ichibei Hikaku
Chousa, (The Comparative Survey on Saving in Japan and the United States),” (Tokyo: Institute for Posts and Telecommunications Policy, Ministry of Posts and Telecommunications,1997) (in Japanese).
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Economics Letters, Vol. 68, No. 3 (September, 2000), 255-261.
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Vol. 29, No.4 (Fall, 1994), 1205-1234.
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Asia and the U nited States (Honolulu: East-West Center, 1998).
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toshite (Intergenerational Transfers within Families: With Emphasis on Inheritances of Residential Properties),” JCER Economic Journal, No. 22 (March, 1992), 166-189.
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Hikaku Chousa Kekka Houkokusho (The Lives and Attitudes of the Elderly: The Report on
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25

Table 1
Variable Deﬁnitions
Characteristics of Respondent (Child)inheritance expectations
dummy = 1 if answered “gift or inheritance from parents” to the following question:“Do you plan to live in your own owner-occupied house twenty years
from now? If you plan to live in your own owner-occupied house,
how do you plan to obtain it?”0 otherwise.
parental assistance expectations dummy = 1 if answered “own funds and parental ﬁnancial assistance”
to the question,
0 otherwise.
altruism
dummy = 1 if answered “yes” to the following question:“Would you like to take care of your aged parents
even if you do not expect an inheritance from your parents?”
0 otherwise.
exchange motive
dummy = 1 if not answered “yes” to the question,
0 otherwise.
inheritance experiencedummy = 1 if answered ”acquired it as gift or bequest from parents
or received parental ﬁnancial assistance” to the following question:“If you live in a owner-occupied house, who is the owner of it
and how did you obtain it (including residential land)
if you are the owner?”0 otherwise.
respondent’s income for the last year
income (ten thousand yen)ahave a housing loan
dummy = 1 if have a housing loan,
0 otherwise.
dual earnerdummy = 1 if both respondent and his/her spouse work full-time,
0 otherwise.
femaledummy = 1 if female,
0 otherwise.
age
respondent’s age
agriculture, ﬁshery, or mining
dummy = 1 if work in agriculture, ﬁshery, or mining,
0 otherwise.
self-employment
dummy = 1 if self-employed,
0 otherwise.
Characteristics of Respondent’s Child (Grandchild)
have a grandchilddummy = 1 if have a child,
0 otherwise.
number of grandchildren
number of respondent’s children
co-resident
dummy = 1 if co-reside with one or more children,
0 otherwise.
living apartdummy = 1 if do not co-reside with any children,
0 otherwise.
dummy = 1 if have one or more children
pre-nursery school ageb
and at least one of children is pre-nursery school age,
0 otherwise.
nursery school age and older
dummy = 1 if have one or more children and no pre-nursery school aged children,
0 otherwise.
otherwise
dummy = 1 if not dual earner or not have pre-nursery school aged children,
0 otherwise.
ab

1 dollar = 126.84 yen in June, 1992.
In Japan, the academic year starts in April and children who are at least three years old on April 1 are eligible to enter
nursery school starting from that academic year.

26

Table 2
Sample Means
Variables
inheritance expectations
altruismexchange motive(inheritance expectations) × (altruism)(inheritance expectations) × (exchange motive)
inheritance experienceparental assistance expectations
have a grandchildnumber of grandchildren(have a grandchild) × (co-resident)(have a grandchild) × (living apart)(have a grandchild) × (pre-nursery school age)(have a grandchild) × (nursery school age and older)(have a grandchild) × (pre-nursery school age)× (dual earner)(have a grandchild) × (otherwise)
income (ten thousand yen)
have a housing loan
dual earnerfemaleagemarriedself-employment
agriculture, ﬁshery, or mining
co-residence with parents or parents-in-law
Number of Observations

Full Sample
0.184
0.321
0.679
0.059
0.124
0.103
0.134
0.701
1.458
0.656
0.045
0.216
0.485
0.038

Married
0.163
0.319
0.681
0.053
0.110
0.126
0.124
0.908
1.888
0.850
0.058
0.279
0.628
0.049

Unmarried
0.255
0.327
0.673
0.082
0.172
0.021
0.169
—
—
—
—
—
—
—

0.663
314.2
0.295
0.224
0.532
36.46
0.772
0.096
0.028
0.434
1221

0.858
334.5
0.335
0.290
0.537
39.27
1
0.099
0.030
0.302
943

—
245.1
0.161
0
0.514
26.91
0
0.086
0.021
0.884
278

The raw data of the SLPALL has 2,804 observations. I select the sample that I use in myanalysis in six stages. First, after eliminating observations that have missing values, 1,602
observations remain. Second, after eliminating observations that have inconsistent responses,
1,557 observations remain. The SLPALL asks several questions about the respondent’s parents and children, and 45 respondents did not answer the questions about the presence andnumber of children, about marital status and parents-in-law, and about whether or not theirparents are alive without contradiction. Third, after eliminating the unemployed, 1,513 observations remain. Fourth, after eliminating the respondents both of whose parents havepassed away, 1,379 observations remain. Fifth, after eliminating the respondents both ofwhose parents-in-law have passed away, 1,231 remain. Finally, after eliminating the divorced,
1,221 observations remain.

27

Table 3
Sample Means for Married Respondents
Variables
inheritance expectations
altruismexchange motive(inheritance expectations) × (altruism)(inheritance expectations) × (exchange motive)
inheritance experienceparental assistance expectations
have a grandchildnumber of grandchildren(have a grandchild) × (co-resident)(have a grandchild) × (living apart)(have a grandchild) × (pre-nursery school age)(have a grandchild) × (nursery school age and older)(have a grandchild) × (pre-nursery school age)× (dual earner)(have a grandchild) × (otherwise)
incomehave a housing loan
dual earnerfemaleage
agriculture, ﬁshery, or mining
self-employment
Number of Observations

Co−residence
0.333
0.302
0.698
0.091
0.242
0.154
0.084
0.947
2.094
0.880
0.066
0.256
0.691
0.084

Living Apart
0.089
0.327
0.673
0.036
0.053
0.113
0.141
0.892
1.799
0.837
0.054
0.290
0.601
0.034

0.863
338.1
0.389
0.421
0.519
41.05
0.066
0.101
285

0.857
332.9
0.311
0.234
0.545
38.51
0.015
0.098
658

Column 1 shows the variable means of married respondents who co-reside with theirparents or parents-in-law. Column 2 shows the variable means of married respondents
who live apart from both parents and in-laws.

28

Table 4
Summary Statistics of Dependent Variables
Standard
Variables
Mean Deviation Minimum
Co-residencewith parents
0.160
0.366
0
with parents-in-law
0.167
0.373
0
with husband’s parents
0.241
0.428
0
with wife’s parents
0.085
0.280
0
with parents or parents-in-law 0.302
0.459
0Number of Observations: 943
Distance between Residencesof parents
2.496
1.053
1
of parents-in-law
2.504
1.028
1
of husband’s parents
2.545
1.073
1
of wife’s parents
2.455
1.004
1
of parents who live closer
2.562
1.058
1
Frequency of Contact
with parents
53.04
85.53
0
with parents-in-law
32.05
62.67
0
with husband’s parents
41.00
74.98
0
with wife’s parents
44.09
76.40
0
with parents or parents-in-law 85.09
112.610
Number of Observations: 658

Maximum
1
1
1
1
1

5
5
5
5
5
300
300
300
300
600

I analyze the determinants of co-residence using the sample of married respondents and the determinants of distance between residences and the frequency ofcontact using the sample of married respondents who live apart from both theirparents and in-laws.

29

Table 5
Marginal Eﬀects on the Probability of Co-residence with Parents or Parents-in-Law
Explanatory Variables
inheritance expectations(1)
0.434∗∗∗(0.044)

altruism(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild

0.024(0.047)−0.024(0.049)0.082(0.053)(2)

0.019(0.037)0.333∗∗∗(0.080)0.487∗∗∗(0.050)0.022(0.047)−0.025(0.049)0.080(0.054)

number of grandchildren(have a grandchild)× (co-resident)(have a grandchild)× (living apart)(have a grandchild)× (pre-nursery school age)(have a grandchild)× (nursery school age and older)(have a grandchild)× (pre-nursery school age)× (dual earner)(have a grandchild)× (otherwise)
incomehave a housing loan
dual earnerfemaleage
agriculture, ﬁshery,or miningself-employment
Number of Observations
χ2 statistic
Pseudo R2
Log Likelihood

Speciﬁcation
(3)
(4)

0.019
(0.037)
0.338∗∗∗(0.080)0.482∗∗∗(0.050)0.017(0.047)−0.028(0.049)0.019(0.037)0.333∗∗∗(0.080)0.486∗∗∗(0.050)0.022(0.047)−0.025(0.049)

(5)

(6)

0.017
(0.037)
0.335∗∗∗(0.080)0.486∗∗∗(0.050)0.023(0.047)−0.027(0.049)0.019(0.037)
0.335∗∗∗(0.080)0.486∗∗∗(0.050)0.020(0.047)−0.030(0.049)0.047∗∗∗(0.018)0.081(0.055)0.077(0.101)0.107(0.070)0.067(0.063)−0.00012 ∗(0.000070)
0.125∗∗∗(0.036)
0.192∗∗∗(0.038)−0.055(0.042)0.0068∗∗∗(0.0019)
0.236∗∗(0.103)−0.053(0.047)
943
163.4
0.141
−496.0−0.00012 ∗(0.000070)
0.127∗∗∗(0.036)
0.194∗∗∗(0.038)−0.060(0.042)0.0067∗∗∗(0.0019)0.238∗∗(0.104)−0.058(0.047)
943
166.5
0.144
−494.5−0.00012 ∗(0.000071)
0.121∗∗∗(0.036)
0.195∗∗∗(0.038)−0.062(0.042)0.0059∗∗∗(0.0019)0.230∗∗(0.103)−0.067(0.046)
943
171.5
0.148
−492.0−0.00012 ∗(0.000071)
0.127∗∗∗(0.036)
0.195∗∗∗(0.038)−0.059(0.042)0.0068∗∗∗(0.0021)0.237∗∗(0.104)−0.058(0.047)
943
166.5
0.144
−494.5−0.00012 ∗(0.000070)
0.128∗∗∗(0.036)
0.196∗∗∗(0.038)−0.056(0.042)0.0077∗∗∗(0.0023)0.238∗∗(0.104)−0.057(0.047)
943
167.2
0.144
−494.20.209∗∗(0.105)0.067(0.056)−0.00012 ∗(0.000070)
0.127∗∗∗(0.036)0.169∗∗∗(0.041)−0.057(0.042)0.0075∗∗∗(0.0020)0.243∗∗(0.104)−0.056(0.047)
943
169.0
0.146
−493.2Standard errors are in parentheses. Asterisks denote signiﬁcant levels: ∗ 10 %, ∗ ∗ 5 %, and ∗ ∗ ∗ 1 %. The
χ2 statistic denotes the χ2 statistic for the null hypothesis that all coeﬃcients excluding the intercept are zero.
These notes also apply to Tables 7 through 15.

30

Table 6
Determinants of Distance between Respondent’s Residence and That of Parents Who Live Closer to Respondent
Explanatory Variables
inheritance expectations(1)
0.291∗(0.151)

altruism(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild

0.278∗∗(0.136)−0.027(0.123)−0.031(0.141)(2)−0.047(0.094)0.332(0.234)0.270(0.194)0.278∗∗(0.136)−0.024(0.123)−0.030(0.141)have a housing loan
dual earnerfemaleage
agriculture, ﬁshery,or miningself-employment
Number of Observations
χ2 statistic
Pseudo R2
Log Likelihood−0.047(0.094)0.328(0.234)0.270(0.194)0.278∗∗(0.136)−0.024(0.123)−0.044(0.094)0.326(0.234)0.299(0.194)0.272∗∗(0.136)−0.023(0.123)(5)(6)−0.037(0.095)0.330(0.234)0.276(0.194)0.274∗∗(0.136)−0.020(0.124)−0.045(0.095)0.329(0.234)0.270(0.194)0.279∗∗(0.136)−0.024(0.123)−0.021(0.047)

number of grandchildren(have a grandchild)× (co-resident)(have a grandchild)× (living apart)(have a grandchild)× (pre-nursery school age)(have a grandchild)× (nursery school age and older)(have a grandchild)× (pre-nursery school age)× (dual earner)(have a grandchild)× (otherwise)
incomeSpeciﬁcation(3)(4)−0.032(0.142)0.474(0.243)−0.085(0.150)0.040(0.156)−0.099(0.267)−0.00023(0.00019)
0.148(0.096)
0.257∗∗(0.107)0.826∗∗∗(0.119)−0.0083(0.0053)−0.139(0.364)0.344∗∗(0.150)
658
143.4
0.076
−865.6−0.00025(0.00019)
0.147(0.096)0.255∗∗(0.107)0.824∗∗∗(0.119)−0.0083(0.0053)−0.148(0.364)0.345∗∗(0.150)
658
143.7
0.076
−865.531−0.00024(0.00019)
0.151(0.096)0.251∗∗(0.108)0.827∗∗∗(0.119)−0.0079(0.0054)−0.136(0.366)0.354∗∗(0.152)
658
143.8
0.076
−865.4−0.00024(0.00019)
0.173(0.097)0.243∗∗(0.108)0.820∗∗∗(0.119)−0.013(0.0057)−0.139(0.365)0.335∗∗(0.151)
658
150.2
0.080
−862.2−0.00024(0.00019)
0.141(0.096)0.246∗∗(0.108)0.809∗∗∗(0.120)−0.011(0.0063)−0.149(0.364)0.345∗∗(0.150)
658
144.8
0.077
−864.9−0.023(0.143)−0.00025(0.00019)
0.148(0.096)
0.268∗∗(0.115)0.822∗∗∗(0.119)−0.0086(0.0054)−0.151(0.364)0.345∗∗(0.150)
658
143.8
0.076
−865.4

Table 7
Determinants of Distance between Respondent’s Residence and That of the Husband’s Parents
Explanatory Variables
inheritance expectations(1)
0.460∗∗∗(0.149)altruism(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild

0.452∗∗∗(0.134)0.0077(0.123)0.105(0.140)(2)−0.069(0.094)0.438∗(0.232)0.488∗∗∗(0.190)0.447∗∗∗(0.134)0.012(0.123)0.104(0.141)

number of grandchildren(have a grandchild)× (co-resident)(have a grandchild)× (living apart)(have a grandchild)× (pre-nursery school age)(have a grandchild)× (nursery school age and older)(have a grandchild)× (pre-nursery school age)× (dual earner)(have a grandchild)× (otherwise)
incomehave a housing loan
dual earnerfemaleage
agriculture, ﬁshery,or miningself-employment
Number of Observations
χ2 statistic
Pseudo R2
Log Likelihood

Speciﬁcation(3)(4)−0.068(0.094)0.441∗(0.232)0.494∗∗∗(0.190)0.449∗∗∗(0.134)0.014(0.122)−0.067(0.094)0.433∗(0.232)0.516∗∗∗(0.191)0.444∗∗∗(0.134)0.013(0.123)(5)(6)−0.056(0.094)0.435∗(0.232)
0.498∗∗∗(0.190)0.442∗∗∗(0.134)0.017(0.123)−0.065(0.094)0.432∗(0.232)0.488∗∗∗(0.190)0.449∗∗∗(0.134)0.013(0.123)0.019(0.047)0.103(0.141)
0.602(0.241)
0.029(0.150)0.201(0.155)−0.025(0.266)−0.00036 ∗(0.00019)
0.113(0.095)0.285∗∗∗(0.106)−0.057(0.116)−0.0070(0.0053)
0.481(0.345)0.470∗∗∗(0.148)
658
57.58
0.030
−918.4−0.00038 ∗(0.00019)
0.113(0.095)0.282∗∗∗(0.106)−0.060(0.116)−0.0069(0.0053)
0.468(0.346)
0.467∗∗∗(0.148)
658
58.30
0.030
−918.132−0.00039 ∗∗(0.00019)
0.116(0.095)0.279∗∗∗(0.107)−0.056(0.116)−0.0065(0.0053)
0.465(0.347)0.460∗∗∗(0.150)
658
57.91
0.030
−918.3−0.00038 ∗(0.00019)
0.138(0.096)
0.269∗∗∗(0.107)−0.069(0.116)−0.011(0.0056)
0.479(0.346)0.459∗∗∗(0.149)
658
64.80
0.034
−914.8−0.00038 ∗(0.00019)
0.105(0.095)0.269∗∗∗(0.107)−0.082(0.117)−0.012(0.0063)0.467(0.346)
0.466∗∗∗(0.148)
658
60.50
0.031
−917.00.116(0.142)−0.00038 ∗(0.00019)
0.114(0.095)0.305∗∗∗(0.114)−0.064(0.116)−0.0075(0.0054)0.461(0.346)
0.466∗∗∗(0.148)
658
58.64
0.031
−917.65

Table 8
Determinants of Frequency of Contact with Parents or Parents-in-Law
Explanatory Variables
inheritance expectations

(1)
20.52
(15.37)

altruism(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild42.63∗∗∗(13.82)
7.689(12.62)−4.683(14.44)(2)

2.768(9.636)13.85(23.89)24.67(19.60)42.37∗∗∗(13.86)
7.480(12.64)−4.877(14.45)have a housing loan
dual earnerfemaleage
agriculture, ﬁshery,or miningself-employment
intercept
Number of Observations
χ2 statistic
Pseudo R2
Log Likelihood

2.761(9.634)13.41(23.90)24.48(19.58)42.37∗∗∗(13.85)7.431(12.63)2.884(9.611)
13.26(23.83)26.60(19.58)41.89∗∗∗(13.82)
7.626(12.60)

(5)

(6)

1.232
(9.656)14.38(23.84)23.69(19.57)43.08∗∗∗(13.83)6.768(12.61)

1.528(9.643)15.68(23.86)24.59(19.56)41.87∗∗∗(13.83)
6.865(12.61)−2.403(4.850)

number of grandchildren(have a grandchild)× (co-resident)(have a grandchild)× (living apart)(have a grandchild)× (pre-nursery school age)(have a grandchild)× (nursery school age and older)(have a grandchild)× (pre-nursery school age)× (dual earner)(have a grandchild)× (otherwise)
incomeSpeciﬁcation(3)(4)−5.131(14.41)
32.23(24.55)4.238(15.35)−16.26(15.85)34.38(27.21)−0.024(0.019)2.759(9.798)24.18∗∗(10.91)
19.53(11.91)−1.943∗∗∗(0.544)−9.438(35.50)54.35∗∗∗(15.25)141.5∗∗∗(23.62)658
67.66
0.0085−3968−0.024(0.019)2.877(9.802)24.28∗∗(10.92)
19.64(11.92)−1.946∗∗∗(0.544)−8.984(35.54)54.07∗∗∗(15.28)143.5∗∗∗(24.39)658
67.82
0.0085−3968

33−0.023(0.019)3.126(9.816)23.95∗∗(10.95)19.87∗(11.92)−1.919∗∗∗(0.547)−7.701(35.70)55.03∗∗∗(15.42)
142.1∗∗∗(23.48)658
67.95
0.0085−3968−0.023(0.019)4.767(9.829)23.23∗∗(10.91)
19.06(11.89)−2.303∗∗∗(0.575)−8.311(35.45)53.27∗∗∗(15.25)155.3∗∗∗(25.13)658
71.30
0.0089−3966−0.024(0.019)3.900(9.798)25.91∗∗(10.94)22.35∗(11.99)−1.354∗∗(0.641)−8.915(35.47)54.26∗∗∗(15.25)121.9∗∗∗(27.35)658
70.81
0.0088−3966−8.445(14.57)−0.024(0.019)2.467(9.784)
17.19(11.66)
20.54∗(11.90)−1.777∗∗∗(0.552)−6.907(35.49)54.28∗∗∗(15.25)139.2∗∗∗(24.47)658
70.70
0.0088−3966

Table 9
Determinants of Frequency of Contact with Husband’s Parents
Explanatory Variables
inheritance expectations(1)
30.68∗∗∗(11.11)

altruism(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild27.90∗∗∗(10.00)5.818(9.145)−2.492(10.44)(2)

0.757(6.964)30.16∗(17.24)30.91∗∗(14.17)27.91∗∗∗(10.02)5.764(9.159)−2.509(10.45)have a housing loan
dual earnerfemaleage
agriculture, ﬁshery,or miningself-employment
intercept
Number of Observations
χ2 statistic
Pseudo R2
Log Likelihood

0.753(6.964)29.94∗(17.26)30.80∗∗(14.15)27.90∗∗∗(10.02)5.726(9.153)0.935(6.906)29.42∗(17.10)33.37∗∗(14.07)27.26∗∗∗(9.945)5.890(9.083)

(5)

(6)

0.564
(6.992)30.22∗(17.24)30.78∗∗(14.18)28.00∗∗∗(10.03)5.676(9.163)

0.302(6.980)30.83∗(17.25)30.90∗∗(14.17)27.73∗∗∗(10.02)5.538(9.158)−1.136(3.508)

number of grandchildren(have a grandchild)× (co-resident)(have a grandchild)× (living apart)(have a grandchild)× (pre-nursery school age)(have a grandchild)× (nursery school age and older)(have a grandchild)× (pre-nursery school age)× (dual earner)(have a grandchild)× (otherwise)
incomeSpeciﬁcation(3)(4)−2.793(10.36)46.07∗∗∗(17.70)−1.339(11.11)−3.985(11.49)12.25(19.71)−0.025∗∗(0.014)2.824(7.086)5.564(7.899)−15.98∗∗(8.617)−1.234∗∗∗(0.395)
13.94(25.59)61.95∗∗∗(11.09)92.40∗∗∗(17.08)658
70.46
0.0099−3508−0.025∗(0.014)2.838(7.090)5.595(7.904)−15.94∗(8.624)−1.235∗∗∗(0.395)
14.09(25.63)61.94∗∗∗(11.11)92.87∗∗∗(17.63)658
70.47
0.0099−3508

34−0.025∗(0.014)2.941(7.101)
5.456(7.928)−15.85∗(8.627)−1.224∗∗∗(0.397)
14.68(25.74)62.40∗∗∗(11.21)92.11∗∗∗(16.98)658
70.52
0.0099−3508−0.024∗(0.014)5.265(7.067)4.260(7.848)−16.70∗(8.556)−1.699∗∗∗(0.415)15.24(25.43)60.88∗∗∗(11.02)108.2∗∗∗(18.07)
658
81.85
0.011
−3503

−0.025∗(0.014)2.971(7.102)5.803(7.932)−15.59∗(8.699)−1.158∗∗(0.466)
14.10(25.63)61.97∗∗∗(11.11)90.07∗∗∗(19.82)
658
70.57
0.010
−3508

−3.863(10.55)−0.025∗(0.014)2.673(7.088)2.922(8.459)−15.60∗(8.628)−1.170∗∗∗(0.401)
14.86(25.60)62.04∗∗∗(11.10)91.24∗∗∗(17.72)
658
71.25
0.010
−3508

Table 10
Marginal Eﬀects on the Probability of Co-residence with Parents or Parents-in-Law

Explanatory Variables(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild
Number of Observations(1)
0.333∗∗∗(0.080)0.487∗∗∗(0.050)0.022(0.047)−0.025(0.049)0.080(0.054)943(2)0.373∗∗∗(0.108)0.371∗∗∗(0.084)0.056(0.072)−0.030(0.072)0.088(0.071)436(3)0.214∗(0.123)0.584∗∗∗(0.060)−0.011(0.063)−0.045(0.069)0.083(0.085)507(4)0.305∗∗∗(0.082)
0.491∗∗∗(0.049)0.0003(0.052)−0.035(0.069)0.102(0.061)813

Sample(5)0.280∗∗∗(0.082)0.452∗∗∗(0.047)−0.006(0.061)−0.035(0.055)0.054(0.085)642(6)0.167∗(0.070)0.254∗∗∗(0.040)−0.090(0.068)−0.053(0.068)0.137(0.115)414(7)0.362∗∗∗(0.105)0.373∗∗∗(0.086)0.039(0.084)−0.053(0.085)0.114(0.087)
343

(8)
0.179
(0.123)0.577∗∗∗(0.059)−0.029(0.065)−0.049(0.074)0.095(0.090)470(9)0.367∗∗(0.144)0.481∗∗∗(0.074)−0.040(0.066)−0.136(0.098)0.166(0.103)439(10)0.528∗∗(0.135)0.404∗∗∗(0.109)−0.035(0.092)0.159(0.127)0.180(0.127)242(11)−0.013(0.218)0.595∗∗∗(0.102)−0.041(0.101)
0.022(0.161)
0.152(0.213)
197

35

Column 1 shows the same estimation results as column 2 in Table 7. Columns 2 through 8 show the estimation results for the same speciﬁcation ascolumn 1 in this table and column 2 in Table 7 using various subsamples. Columns 2 and 3 show the results for the subsamples of males and females,
respectively. Columns 4 through 6 show the results excluding respondents who are not able to travel to and from their own residence and either theirparents’ or in-laws’ residence in one day, respondents who are not able to arrive at either their parents’ or in-laws’ residence within one hour by car,bus, or train, and respondents who do not live within walking distance between respondent’s own residence and either their parents or parents-in-law,respectively. Columns 7 and 8 show the results for the subsamples of males and females, respectively, excluding respondents who are not able to travel
to and from their own residence and either of their parents’ or in-laws’ residence in one day. Column 9 shows the results for the subsample of those who
are forty and older. Columns 10 and 11 show the results for the forty and older subsamples of males and females, respectively.

Table 11
Determinants of Distance between Respondent’s Residence and That of Parents Who Live Closer to Respondent

Explanatory Variables(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild
Number of Observations

(1)
0.332
(0.234)0.270(0.194)0.278∗∗(0.136)−0.024(0.123)−0.030(0.141)
658

(2)
0.487
(0.346)0.221(0.273)0.135(0.213)0.158(0.184)−0.010(0.193)
299

(3)
0.318
(0.337)0.407(0.283)0.392∗∗(0.182)−0.126(0.170)−0.083(0.215)
359

(4)
0.131
(0.260)0.394∗(0.227)0.159(0.154)−0.129(0.143)0.165(0.167)
528

(5)
0.105
(0.380)0.441(0.289)0.217(0.204)−0.182(0.212)−0.129(0.254)357

Sample(6)(7)
0.826∗ −0.198(0.429) (0.352)
0.472
0.443
(0.380) (0.296)
0.018
0.240
(0.279) (0.190)−0.040 −0.110(0.235) (0.186)
0.343−0.013(0.257) (0.229)
206
322

(8)
0.315
(0.241)
0.156(0.205)0.367∗∗∗(0.141)−0.0036(0.125)−0.0012(0.144)
644

(9)
0.456
(0.285)−0.036(0.249)0.101(0.177)0.079(0.147)0.024(0.165)
529

(10)
0.479
(0.347)0.029(0.281)
0.047(0.216)0.154(0.185)0.0017(0.194)
298

(11)
0.211
(0.358)0.421(0.316)0.649∗∗∗(0.196)−0.052(0.174)−0.015(0.224)
346

(12)
0.641
(0.559)0.353(0.333)0.350∗(0.186)−0.017(0.267)0.090(0.313)290

36

Columns 2 through 11 show the estimation results for the same speciﬁcation as column 1 in this table and column 2 in Table 8 using various subsamples.
Columns 2 and 3 show the results for the subsamples of males and females, respectively. Columns 4 and 5 show the results for the sample excluding
respondents who are not able to travel to and from their own residence and either their parents’ or in-laws’ residence in one day and respondents who
are not able to arrive at either their parents’ or in-laws’ residence within one hour by car, bus, or train, respectively. Columns 6 and 7 show the results
for the subsamples of males and females, respectively, excluding respondents who are not able to travel to and from their own residence and either theirparents’ or in-laws’ residence in one day. Columns 8 and 9 show the results for the sample excluding respondents who live adjacent to their parents orparents-in-law and respondents who live within walking distance of either their parents or parents-in-law, respectively. Columns 10 and 11 show theresults for the subsamples of males and females, respectively, excluding respondents who live adjacent to their parents or parents-in-law. Column 12shows the results for the subsample of those who are forty and older.

Table 12
Determinants of Distance between Respondent’s Residence and That of the Husband’s Parents

Explanatory Variables(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild
Number of Observations(1)
0.438∗(0.232)0.488∗∗∗(0.190)0.447∗∗∗(0.134)0.012(0.123)0.104(0.141)
658

(2)
0.528
(0.337)0.380(0.263)0.569∗∗∗(0.208)0.193(0.180)0.193(0.190)
299

(3)
0.517
(0.339)0.692∗∗(0.281)0.374∗∗(0.180)−0.145(0.171)−0.073(0.216)
359

(4)
0.364
(0.251)0.460∗∗(0.218)0.374∗∗(0.148)−0.057(0.135)0.259∗(0.156)
528

(5)
0.460
(0.312)0.620∗∗(0.265)0.348∗(0.180)−0.153(0.174)0.043(0.212)357

Sample(6)(7)
0.768∗
0.305(0.406)(0.343)−0.014 0.756∗∗∗(0.364)(0.292)0.726∗∗∗
0.247(0.263)(0.185)0.030−0.149(0.220)(0.182)0.605∗∗−0.016(0.246)(0.224)
206
322

(8)
0.419
(0.237)0.420∗∗(0.196)0.504∗∗∗(0.136)0.045(0.123)0.133(0.142)
644

(9)
0.419
(0.259)0.320(0.233)0.466∗∗∗(0.164)0.084(0.138)0.126(0.156)
529

(10)
0.521
(0.337)0.302(0.268)0.537∗∗(0.209)0.190(0.180)0.200(0.190)
298

(11)
0.412
(0.357)0.732∗∗(0.310)0.504∗∗∗(0.188)−0.089(0.173)−0.003(0.222)
346

(12)
0.801
(0.558)0.610∗(0.328)0.473∗∗∗(0.184)0.194(0.264)0.291(0.313)290

Column 1 shows the same estimation results as column 2 in Table 9. Columns 2 through 11 show the estimation results for the same speciﬁcation as column 1 inthis table and column 2 in Table 9 using various subsamples. The subsamples used are the same as in Table 13.

37

Table 13
Determinants of Frequency of Contact with Parents or Parents-in-Law

Explanatory Variables(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild
Number of Observations

(1)
15.74
(22.96)23.83(19.60)42.63∗∗∗(13.82)
7.689(12.62)−4.816(14.44)
658

(2)
18.84
(29.71)
40.72(23.28)32.04∗(18.28)38.66∗∗(15.98)−17.47(16.70)
299

(3)
5.406
(37.64)13.64(31.01)48.90∗∗(20.10)−15.42(18.85)9.411(23.91)
359

(4)
6.001
(27.25)21.64(23.67)38.99∗∗(16.06)6.898(14.69)1.982(16.88)
528

(5)
6.083
(35.12)
25.07(29.96)48.51∗∗(20.58)5.071(19.73)−8.606(24.06)357

Sample
(6)
(7)
28.20
−8.126(37.50) (38.86)
46.07
13.91
(32.51) (32.80)
25.62
41.79∗∗(24.28) (20.98)
44.62∗∗ −17.31(19.81) (20.65)−11.51
12.28(21.21) (25.39)
206
322

(8)
10.73
(23.41)
24.96(19.26)49.84∗∗∗(13.37)
11.19(12.14)−3.630(13.96)
644

(9)
5.428
(21.27)15.89(19.09)28.79∗∗(13.53)
11.73(11.27)−2.116(12.79)
529

(10)
19.44
(29.71)45.53∗(23.76)34.19∗(18.40)38.89∗∗(15.98)−17.81(16.70)298(11)−3.482(36.70)7.009(29.82)61.84∗∗∗(18.87)−7.179(17.64)14.32(22.63)
346

(12)
44.71
(48.70)19.71(28.57)44.17∗∗∗(16.18)17.68(23.14)−39.15(26.81)290

Column 1 shows the same estimation results as column 2 in Table 10. Columns 2 through 11 show the estimation results for the same speciﬁcation ascolumn 1 in this table and column 2 in Table 10 using various subsamples. The subsamples used are the same as in Tables 13 and 14.

38

Table 14
Determinants of Frequency of Contact with Husband’s Parents

Explanatory Variables(inheritance expectations)× (altruism)(inheritance expectations)× (exchange motive)
inheritance experienceparental assistance expectations
have a grandchild
Number of Observations(1)
30.16∗(17.24)30.91∗∗(14.17)27.91∗∗∗(10.02)5.764(9.159)−2.509(10.45)
658

(2)
27.37
(24.39)28.27(19.15)46.53∗∗∗(15.14)28.95∗∗(13.17)−8.876(13.71)
299

(3)
36.81
(24.83)37.69∗(20.49)13.96(13.22)−16.30(12.51)−1.248(15.82)
359

(4)
31.87
(20.05)31.91∗(17.47)24.92∗∗(11.82)6.746(10.81)
0.163(12.45)
528

(5)
42.44
(26.83)43.04∗(23.02)26.92∗(15.71)
4.768(15.06)−16.15(18.45)357

Sample
(6)
(7)
41.17
32.11
31.50) (26.20)
23.56
40.35∗(27.42) (22.16)
50.18∗∗
10.72(20.60) (14.10)
33.87∗∗ −16.26(16.72) (13.91)−7.766 −0.147(17.81) (17.17)
206
322

(8)
23.38
(15.94)28.31∗∗(13.14)32.52∗∗∗(9.134)9.164(8.312)−1.244(9.531)
644

(9)
13.79
(15.10)27.03∗∗(13.58)32.70∗∗∗(9.654)12.92(8.067)−1.092(9.090)
529

(10)
27.96
(24.38)33.03∗(19.54)48.72∗∗∗(15.24)29.17∗∗(13.16)−9.216(13.71)
298

(11)
21.03
(20.99)26.60(17.08)20.73∗∗(10.79)−8.393(10.17)4.929(13.02)346(12)87.59∗∗(37.22)
13.46(21.67)20.75∗(12.31)
27.02(17.82)−2.352(20.57)290

Column 1 shows the same estimation results as column 2 in Table 11. Columns 2 through 11 show the estimation results for the same speciﬁcation ascolumn 1 in this table and column 2 in Table 11 using various subsamples. The subsamples used are the same as Tables 13 through 15.

39