Discussion Paper No. 674

IS THE ELDEST SON DIFFERENT?
THE RESIDENTIAL CHOICE OF
SIBLINGS IN JAPAN

Midori Wakabayashi
andCharles Yuji Horioka

October 2006
Revised December 2009

The Institute of Social and Economic Research
Osaka University
6-1 Mihogaoka, Ibaraki, Osaka 567-0047, JapanIs the Eldest Son Different? The Residential Choice of Siblings in Japan**Midori Wakabayashi∗ and Charles Yuji Horioka+
December 2009
Abstract: In this paper, we analyze the determinants of the living arrangements(coresidence behavior) of elderly parents and their children (whether elderly parents live with theirchildren, and if so, with which child) in Japan using micro data from a household survey.

Our

results provide support for all four explanations of coresidence behavior but especially for the life
cycle and dynasty models (both of which assume selfishly motivated parents) and social norms andtraditions: The fact that parents who were self-employed before retirement are more likely to livewith their children, the fact that parents are less likely to live with sons who adopt their wife’ssurname, and the fact that parents are more likely to live with daughters whose husbands adopt
their surname constitute evidence in favor of the dynasty model. The fact that parents who were(relatively wealthy) executives before retirement and parents who are homeowners are more likely
to live with their children and the fact that parents are more likely to live with less educatedchildren constitute evidence in favor of the selfish life cycle model (or the altruism model). And
the fact that parental attitudes toward their children affect their coresidence behavior, the fact thatparents are more likely to live with their eldest child if their eldest child is a son, and the fact thatparents are most likely to live with their eldest son even if he is not the eldest child constituteevidence in favor of social norms and traditions.
Keywords: Aged, Altruism Model, Bequest Motive, Bequests, Care of the Elderly, Children,
Consumer Economics, Coresidence, Culture, Dynasty Model, Economics of the Elderly, Elderly,**

We would also like to thank Editor-in-Chief Robert Dekle, an Associate Editor, and an anonymousreferee of this Journal, Naohito Abe, Shigeki Kano, Daiji Kawaguchi, Kouhei Kubota, Wataru Kureishi,
Oleksandr Movshuk, Shizuka Sekita, Kwanho Shin, Keiko Tamada, the members of Horioka’s graduate
seminar, and seminar participants at Toyama University and Osaka Prefecture University for theirhelpful comments and discussions.

We also thank National Family Research of Japan and theInformation Center for Social Science Research on Japan, Institute of Social Science, University ofTokyo (SSJ Data Archive) for providing micro data from the 1998 National Survey of Families (Kazoku
ni tsuiteno Zenkoku Chousa) (SSJDA0191) and the Ministry of Education, Culture, Sports, Science andTechnology of the Japanese Government for Grants-in-Aid for Scientific Research numbers 18330068,
19330062, and 20223004 and the Global Center of Excellence (GCOE) Project of the Graduate Schoolof Economics and the Institute of Social and Economic Research of Osaka University, which supported
this research.
∗

Correspondence to: Midori Wakabayashi, College of Economics, Osaka Prefecture University, 1-1,
Gakuen-cho, Sakai, Osaka 599-8531, Japan. E-mail: mwaka@eco.osakafu-u.ac.jp+

Institute of the Social and Economic Research, Osaka University, 6-1, Mihogaoka, Ibaraki, Osaka

567-0047, Japan, and National Bureau of Economic Research, Inc. Cambridge Massachusetts,
U.S.A..

E-mail: horioka@iser.osaka-u.ac.jp

Eldest Son, Family Business, Family Economics, Family Line, Household Behavior, Japan, Life
Cycle Model, Living Arrangements, Parents, Primogeniture, Residential Choice, Selfish Life Cycle
Model, Siblings, Social Norms, Strategic Bequest Motive, and Traditions
Journal of Economic Literature classification numbers: D12, D91, J14, and Z13Forthcoming in Japan and the World Economy, volume 20, issue 4 (December 2009).

1. Introduction
Children, especially eldest sons, are much more likely to live with their elderly parents inJapan than in the West.

Why is that?

live with each other in Japan?

What motivates elderly parents and their children to

Which child tends to live with the parents in Japan and why?

Is it possible to explain the living arrangements (coresidence behavior) of elderly parents andtheir children in Japan using existing theoretical models of household behavior or do we haveto resort to social norms and traditions?

The social norm in Japan has been for the eldest son

to live with his elderly parents, to take care of them, to carry on the family line, and to receive
the parents’ entire bequest including the family home, and it is possible that the eldest son
lives with his elderly parents not because it is economically rational for him to do so but
simply because he is adhering to the aforementioned social norm.
In this paper, we analyze the determinants of the living arrangements (coresidence
behavior) of elderly parents and their children (whether elderly parents live with their children,and if so, with which child) in Japan using micro data from the 1998 “National Family Survey(in Japanese, Kazoku ni tsuiteno Zenkoku Chousa),” which was conducted in January 1999
and provided by National Family Research of Japan and the Information Center for Social
Science Research on Japan, Institute of Social Science, University of Tokyo (SSJ Data
Archive).

In so doing, we try to shed light on which theoretical model of household behavior(the dynasty model, the selfish life cycle model, or the altruism model) applies in Japan andthe extent to which Japanese households adhere to social norms and traditions.
There have been a number of studies of the determinants of the living arrangements ofelderly parents and their children in Japan.

One such study is Horioka, et al. (2000), whichanalyzes data from the 1996 “U.S.-Japan Comparison Survey of Saving (Chochiku ni kansuru
Nichibei Hikaku Chousa),” conducted by the Institute of Posts and Telecommunications Policyof the former Ministry of Posts and Telecommunications of the Government of Japan, andfinds that elderly parents are more likely to live with their children if they are planning toleave a bequest to their children, whereas such a relationship is not observed in the UnitedStates.

Similarly, Ohtake (1991) and Ohtake and Horioka (1994) analyze data from the 1986

1

“National Livelihood Survey (Kokumin Seikatsu Kiso Chousa),” conducted by the Ministry of
Health, Labor and Welfare of the Government of Japan, and find that the likelihood ofcoresidence increases as the bequeathable wealth (housing assets) of elderly parents
increases.1

Iwamoto and Fukui (2001) analyze data from the 1986 and 1995 administrationsof the same survey used by Ohtake (1991) and Ohtake and Horioka (1994) and find thatelderly parents living in the ten largest cities (the value of whose land holdings is much higher
than those living in other areas) are more likely to live with their children than those living
elsewhere.

All of these results suggest that the Japanese are selfishly motivated, with elderly

parents using bequests to induce their children to live with them, and children living with theirelderly parents in order to receive a bequest from their parents.
Yamada (2006) analyzes data from the “Survey on Life Planning in the Age of Long
Life (Chouju Jidai no Seikatsu Sekkei),” conducted by the Japan Institute of Life Insurance in
1992, and finds that children are more likely to live with their parents if they expect to inherit
their parents’ home, if both the husband and wife work, and if they have pre-nursery school
age children.

These results suggest that children are selfishly motivated in Japan and thatthey live with their parents in order to inherit their parents’ home and/or in order to elicit childcare services from their parents.

In a related vein, Kureishi and Wakabayashi (2007) analyze

data from the 2003 “National Family Survey (in Japanese, Kazoku ni tsuiteno Zenkoku
Chousa),” the same data source used in this paper, and find that children’s desire to live with
their parents is motivated by a desire to receive child care services from their parents. All of
the foregoing results imply that both parents and children are selfish in Japan and that theircoresidence behavior is selfishly motivated.
By contrast, Ando, et al. (1986) find that children who are self-employed are more
likely to live with their elderly parents, and Iwamoto and Fukui (2001) find that elderly
parents who are farmers are more likely to live with their children.

To the extent thatJapanese children who live with their elderly parents are more likely to inherit and carry on thefamily business or the family farm, these findings suggest that the dynasty model applies to atleast some extent in Japan.

2

Finally, Martin and Tsuya (1991) and Tsuya and Martin (1992) find that thecoresidence behavior of parents and children in Japan is determined in part by social norms,
with sons living in small towns or rural areas and sons in arranged marriages (both of whom
are more likely to hold traditional views), eldest sons, and daughters married to men other thaneldest sons being more likely to live with their parents.

However, Martin and Tsuya (1991)

also find that social norms have weakened over time, with the elderly relying less on sons anddaughters-in-law and more on spouses and daughters for assistance.
Thus, previous studies of the living arrangements (coresidence behavior) of elderly
parents and their children in Japan suggest that the selfish life cycle model, the dynasty model,
and social norms all hold in Japan to some extent and can partly explain the coresidence
behavior of parents and children in Japan, but they suffer from a number of drawbacks such as
their failure to take account of siblings (multiple children).2
The contributions of this paper are as follows: first, our paper is the first to analyze theliving arrangements (coresidence behavior) of elderly parents and their children focusing on
the number of children and the composition of children’s siblings in Japan.

We believe that it

is important to take account of information on the number of children and on the compositionof children’s siblings when analyzing the living arrangements of parents and their children
because many hypotheses regarding living arrangements predict that these factors will be
important (for example, the dynasty model of Chu (1991) and the strategic bequest motive ofBernheim, et al. (1985)). Many previous studies, especially Japanese studies, had no choice
but to ignore children who are not living with their parents because of data limitations. In thispaper, by contrast, the survey we use contains various information not only on the elderly
parents but also on every child, including the distance between the residence of the parents andthat of every child, which will enable us to analyze the living arrangements of elderly parents
and their children rigorously.
The second contribution of this paper is to analyze the impact of social norms andtraditions on the living arrangements (coresidence behavior) of elderly parents and theirchildren.

The survey we use asks respondents about their attitudes towards their children,3and since these questions capture whether or not respondents adhere to Japanese social norms
and traditions, we can use them to analyze the impact of social norms and traditions on theliving arrangements of parents and their children.
To preview our main findings, our results provide support for all four explanations ofcoresidence behavior but especially for the life cycle and dynasty models (both of whichassume selfishly motivated parents) and social norms and traditions: The fact that parents who
were self-employed before retirement are more likely to live with their children, the fact thatparents are less likely to live with sons who adopt their wife’s surname, and the fact thatparents are more likely to live with daughters whose husbands adopt their surname constituteevidence in favor of the dynasty model. The fact that parents who were (relatively wealthy)
executives before retirement and parents who are homeowners are more likely to live with
their children and the fact that parents are more likely to live with less educated children
constitute evidence in favor of the selfish life cycle model (or the altruism model). And thefact that parental attitudes toward their children affect their coresidence behavior, the fact thatparents are more likely to live with their eldest child if their eldest child is a son, and the factthat parents are most likely to live with their eldest son even if he is not the eldest childconstitute evidence in favor of social norms and traditions.
This paper is organized as follows: in section 2, we discuss four theoretical models ofhousehold behavior and their implications for parent-child coresidence; in section 3, we
describe the data source and sample selection; in section 4, we describe the estimation modeland estimation method; in section 5, we present some descriptive statistics; in section 6, we
present our estimation results; and section 7 concludes.

2. Theoretical Considerations
In this section, we briefly introduce four theoretical models of household behavior and discuss
their implications for parent-child coresidence.

(I)

The Dynasty Model.

4

The dynasty or lineal model of Chu (1991) assumes that parents care about the perpetuation of
the family line and/or the family business and hence that they will behave so as to minimize
the probability of lineal or dynastic extinction.

Thus, this model implies that parents will

leave a bequest to their children only if their children carry on the family line and/or thefamily business.

It is common for the child who carries on the family line and/or the familybusiness to live with his or her parents, as discussed in more detail in section 4 below, so thismodel implies that the child who carries on the family line and/or the family business will livewith the parents.

(II)

The Selfish Life Cycle Model.

The selfish life cycle model of Modigliani and Brumberg (1955) assumes that parents as well
as children are selfish and implies that parents will not leave a bequest to their children unlesstheir children live with them and take care of them during old age (i.e., that they will induce
their children to live with them and take care of them during old age by promising them abequest if they do so).

By the same token, children will not live with their parents and takecare of them during old age unless they expect to receive a bequest from their parents(i.e.,

they will induce their parents to leave a bequest to them by living with them and taking care ofthem during old age).

In short, bequests will be a quid pro quo for coresidence and careduring old age and conversely.

See Bernheim, Summers, and Shleifer (1985) for a rigorous

theoretical analysis of this so-called “strategic bequest motive.”(III)

The Altruism Model.

The altruism model of Barro (1974) and Becker (1974, 1981, 1991) assumes that parents arealtruistic (harbor intergenerational altruism) towards their children and that they derive utility
not only from their own consumption but also from the consumption of their children.

Thismodel implies that parents will leave a bequest to their children whether or not their children
live with them and take care of them during old age.

By the same token, if children are also

altruistic, they will live with their parents and take care of them during old age whether or not5

they expect to receive a bequest from them.

Thus, if individuals behave according to thealtruism model, there should be no relationship between coresidence and bequest motives(unless both parents and children are altruistic).

(IV)

Social Norms and Tradition.

In Japan, it is customary for children (especially the eldest son) to live with their parents and to
take care of them during old age even if their parents do not leave a bequest to them.

Thiscustom arises not from economic considerations but from social norms and traditions—inparticular, from the Confucian teaching that, when children grow up, they should respect andtake care of their parents even if their parents do not leave a bequest to them.

The observed

behavior—that children live with their parents and take care of them during old age even if theirparents do not leave a bequest to them--is identical to the case in which children are altruistic
toward their parents (see model III above), but the mechanism is totally different. See Sakudo(2007) for a theoretical (Nash bargaining) model of parent-child coresidence that incorporates
such a social norm or tradition).

Thus, the four theoretical models of household behavior have different implications forthe determinants of parent-child coresidence. Thus, we can shed light on which theoreticalmodel of household behavior applies in the case of Japan by examining the determinants ofparent-child coresideence.

3. The Data Source and Sample Selection
3.1. The Data Source
The data source we use is micro data from the 1998 “National Family Survey (in Japanese,
Kazoku ni tsuiteno Zenkoku Chousa)” which was conducted in January 1999 and provided by
National Family Research of Japan and the Information Center for Social Science Research on
Japan, Institute of Social Science, University of Tokyo (SSJ Data Archive).
This survey collects a variety of detailed information on respondents and their family

6members--for example, on the structure of respondents’ families, the socioeconomic
characteristics of both parents and children, respondents’ attitudes towards their children, etc.
This survey surveyed a stratified multistage random sample of 10,500 respondents
between the ages of 28 and 77 (born between January 1, 1921 and December 31, 1970) fromthroughout Japan by the drop-off, pick-up method, resulting in 6,985 responses (a response
rate of 66.5%).

3.2. Sample Selection
In this subsection, we discuss the sample we used in our analysis.

Of the 6,985 respondents(hereafter called parents (fathers and mothers) or households), 1,070 have no living children,
952 have one living child, 3,067 have two living children, 1,515 have three living children,
372 have four or more living children, and 9 did not indicate how many living children they
have.

First, we used only the subsample of respondents who have one, two, or three living

children.

Respondents who have four or more living children provide information only on

the three oldest children, so we were forced to drop these respondents.3

Second, we used

only the subsample of respondents for whom the father is 60 or older (if there is no father,
respondents for whom the mother is 60 or older) because we were interested in the living
arrangements of elderly parents and their children.

Third, we dropped all observations forwhich all of the necessary information is not available.

Restricting the sample to respondents

who have one, two and three living children reduced the number of observations from 6,985 to
5,367, restricting the sample to respondents for whom the father (if there is no father, themother) is 60 or older reduced the number of observations further to 2,068, and restricting thesample to respondents for whom all of the necessary information is available reduced thenumber of observations further to 1,652.
In addition, we divide the sample into (i) respondents with multiple children (calledsample (i), with 1,373 observations), (ii) respondents with multiple children including at least
one son (called sample (ii), with 1,125 observations), (iii) respondents with multiple children
including at least one daughter (called sample (iii), with 1,060 observations), and (iv)7

respondents with only one child (called sample (iv), with 279 observations).

4. The Estimation Model and Estimation Method
We use the following multinomial logit model to test what variables affect the living
arrangements (coresidence behavior) of parents and their children:

P ( y = j x) =exp( xβ )
j
1+

(1)

∑ exp( xβ )
4

h =1

h

j = 1, 2, 3, 4
In the case of samples (i), (ii), and (iii), the dependent variable y measures four
alternative living arrangements of elderly parents: in the case of sample (i), parents who livewith the eldest child (=1); parents who live with a child or children other than the eldest child(=2); parents who live with both the eldest child and other children (=3), and parents who live
independently (=4); in the case of sample (ii), parents who live with the eldest son (=1); parents
who live with a child (or children) other than the eldest son (=2); parents who live with both theeldest son and other children (=3), and parents who live independently (=4); and in the case ofsample (iii), parents who live with the eldest daughter (=1); parents who live with a child (orchildren) other than the eldest daughter (=2); parents who live with both the eldest daughter andother children (=3), and parents who live independently (=4). In the case of samples (i), (ii),and (iii), we estimate equation (1) using a multinomial logit model because the dependent
variable y has four unordered response outcomes.4

In the case of sample (iv), parents choose

between living with their only child (=1) and living independently (=0), and thus we use a logit
model to test what variables affect the living arrangements of parents and their only child.
When constructing the dependent variables, we classify the categories “the child lives in thesame house as his/her parents” and “the child lives in a separate house on the same property as
his/her parents” as “the parents live with the child,” and we classify “the child lives withinwalking distance of the parents,” “the child lives within one hour of the parents,” “the child8

lives within three hours of the parents,” and “the child lives more than three hours from theparents” as “the parents live independently.”
The explanatory variables include a vector of variables pertaining to the preferences andeconomic backgrounds of parents and (in the case of sample (i)) the eldest child and otherchildren, (in the case of sample (ii)) the eldest son and other children, (in the case of sample(iii)) the eldest daughter and other children, and (in the case of sample (iv)) the only child.
Our main interest is to shed light on which theoretical model(s) of household behavior
apply in Japan by analyzing the determinants of the living arrangements (coresidence behavior)of elderly parents and their children in the case of parents with multiple children and those with
only one child.

In what follows, we discuss the explanatory variables used in our analysis andtheir theoretical impact on the living arrangements of parents and their children.

(I)

The Dynasty Model

The two variables we use to examine whether individuals behave according to the dynasty
model are hselfempl (a dummy variable that equals one if the father (the mother if there is nofather) was a non-professional self-employed worker before retirement) and. hprofl (a dummy
variable that equals one if the father (the mother if there is no father) was a professional
self-employed worker such as a doctor, lawyer, etc., before retirement) (the base category isfathers (mothers if there is no father) who were salaried workers before retirement).
Self-employed households are different from salaried worker households because the former
have a family business that they would presumably like to pass on to their children, preferably
their eldest son. If the dynasty model applies, the children of self-employed parents will takeover the family business in exchange for receiving a bequest (especially the family business),and since family businesses are often located in, or adjacent to, the parents’ home, the child whotakes over the family business is more likely to live with his/her parents. Thus, if individuals
behave according to the dynasty model, we would expect hselfempl and hprofl to increase theprobability of the parents living with their children, especially their eldest son. Note that theseresults could also be consistent with the selfish life cycle model if the child who lives with the9parents is doing so in return for bequeathing the family business, which presumably generates aconsiderable cash flow, but in our sample, we find that the incomes of the children of
self-employed parents are lower than the incomes of the children of parents in other occupations,which suggests that the explanation based on the selfish life cycle model does not apply.
Another variant of the dynasty model is that parents care about perpetuating the familyname or the family line and hence will leave the largest share of their bequest (especially thefamily home) to the child who carries on the family name or the family line. And it is naturalfor the child who carries on the family name or the family line to live with the parents since heor she will eventually inherit the family home. If this variant of the dynasty model is valid,
parents should be more likely to live with sons who keep their original surnames and daughters
who marry a man who adopts their surname and less likely to live with sons who adopt theirwife’s surname and daughters who adopt their husband’s surname.

Thus, we test this variantof the dynasty model by including the following variables: essurname (a dummy variable that
equals one if there is an eldest son and the eldest son adopts his wife’s surname)), ossurname (adummy variable that equals one if there is at least one son other than the eldest son and at least
one of them adopts his wife’s surname), edsurname (a dummy variable that equals one if there
is an eldest daughter and the eldest daughter married a man who adopted her surname), andodsurname (a dummy variable that equals one if there is at least one daughter other than theeldest daughter and at least one of them married a man who adopted her surname).5

If

individuals behave according to this variant of the dynasty model, we would expect essurname
to reduce the probability of the parents living with the eldest son, ossurname to reduce theprobability of the parents living with a child other than the eldest son, edsurname to increase theprobability of the parents living with eldest daughter, and odsurname to increase the probabilityof the parents living with a child other than the eldest daughter. Note that these findings mightalso be consistent with the selfish life cycle model since those with more noble surnames (whowill tend to be relatively wealthy) will be more likely to want to perpetuate the family line andtheir daughters may be more willing to live with them and to marry a man who is willing to
adopt her surname because of the greater financial rewards from doing so, but since we control

10

for parental wealth using parental occupation, educational attainment, income, andhomeownership status, we believe that we can rule out the explanation based on the selfish life
cycle model.

(II)

The Selfish Life Cycle Model

In order to examine whether individuals behave according to the selfish life cycle model, we
include hexecutive (a dummy variable that equals one if the father (the mother if there is nofather) was an executive before retirement (where executive includes management executive,
executive board member, and management-level employee (including government workers))(the base category is fathers (mothers if there is no father) who were rank-and-file salaried
workers before retirement)), peduc (the average educational attainment (in years) of the parents(if there is only one parent, the educational attainment of that parent), pincome (the income of
the father and mother combined),6 and phouse (a dummy variable that equals one if the parents
live in an owner-occupied home).

If the father was an executive before retirement, if theparents are highly educated, and/or if the combined income of the parents is high, the parents
are presumably relatively wealthy and should have more wealth to leave behind to their children,and thus their children should be more likely to live with them if they are selfishly motivated.
By the same token, the children of parents who are homeowners should also be more likely tolive with their parents if they are selfishly motivated because they can expect to receive thefamily home as a bequest.

Thus, if the selfish life cycle model applies, we would expect

hexecutive, peduc, pincome, and phouse to increase the probability of the parents living with
their children.7

Note, however, that these results could also be consistent with the (one-sided)

altruism model if wealthier parents have larger and more luxurious homes and hence are better
able to induce their children to live with them, even if they do not consciously attempt to coerce
their children into living with them.

(III) The Altruism Model
We included variables relating to the educational attainment of the children as a way of testing11

the altruism model directly.

In particular, in sample (i), we included eeduc (the educational

attainment of the eldest child (in years)) and keduc (the educational attainment of child(ren)other than the eldest child (if the number of such children is two, the average educational
attainment of such children); in sample (iv), we included only eeduc as defined above; insample (ii), we defined eeduc as the educational attainment of the eldest son (in years) andkeduc as the educational attainment of child(ren) other than the eldest son (if the number ofsuch children is two, the average educational attainment of such children); and in sample (iii),
we defined eeduc as the educational attainment of the eldest daughter (in years) and keduc as
the educational attainment of child(ren) other than the eldest daughter (if the number of suchchildren is two, the average educational attainment of such children).

As Horioka (2002)

points out, altruistic parents should leave larger bequests to poorer children, and since
education is a good proxy for earning capacity, altruistic parents should leave larger bequests
to less educated children.8

Moreover, since the family home is often the largest componentof parental wealth, it is plausible to assume that altruistic parents will choose to live with theleast educated (poorest) child and bequeath the family home to him or her.

Thus, we would

expect eeduc to reduce the probability of the parents living with the eldest child, son, ordaughter and keduc to reduce the probability of the parents living with a child other than theeldest child, son, or daughter. Note, however, that since the wage rate of less educatedchildren is presumably lower than that of more highly educated children, meaning that they
have a lower opportunity cost of providing care to their parents, the fact that they are more
likely to live with (and to provide care to) their parents in old age could also be consistent withthe selfish life cycle model.
We also include a variable pertaining to parental attitudes towards their children to enable
us to conduct a further test of the altruism model.

In the survey we use in our analysis,

respondents were asked if they agree with a number of views concerning their attitudes
towards their children, one of which is: “Parents should sacrifice themselves for theirchildren.” Respondents were asked to pick from among the following four choices.
(1) I think so.

12

(2) I tend to think so.
(3) I tend not to think so.
(4) I do not think so.
We created the variable psacrifice (a dummy variable that equals one if parents think (or tend to
think) that parents should sacrifice themselves for their children) and added it to equation (1).
This variable is presumably a good proxy for parents who behave according to the altruism
model because those who agree with this view are willing to put the interests of their children
before their own.

However, since it is not obvious whether altruistic parents will be more orless likely to live with their children, it is not possible to predict a priori whether the marginal
effect of psacrifice will be positive or negative.
Finally, another way to test the altruism model is to see if variables relating to thedynasty and selfish life cycle models (hselfempl, hprofl, essurname, ossurname, edsurname,odsurname, hexecutive, peduc, pincome, hretired*pincome, and phouse) have the expected
impact on the likelihood of parents living with their children.

If they do, this constitutes

evidence unfavorable to the altruism model because the altruism model predicts that the
behavior of parents and children will be motivated by altruism rather than by some sort of quid
pro quo.

(IV) Social Norms and Traditions
One way in which we tested for the importance of social norms is by including elderson (adummy variable that equals one if the eldest child is a son).

If the social norm is for parents tolive with their eldest son regardless of whether the eldest son is the eldest child, the fact that theeldest child is a son should raise the probability that the parents live with their eldest child but
whether the eldest son is the eldest child should not affect the probability that the parents livewith their eldest son.
Another way in which we tested for the importance of Japanese social norms andtraditions was by using two variables created from the same question on parental attitudes
towards their children that was discussed in section III above.

13

Two other views that are asked

about are as follows:(a) Children should live with their parents when the parents become old and cannot take careof themselves.
(b) It is an eldest son’s duty to take care of his parents.
View (a) is consistent with the Japanese social norm or tradition (based on Confucian
teachings) that children should live with their parents and take care of them when their parents
become old, while view (b) is consistent with the Japanese social norm or tradition that moreis expected of the eldest son.

Thus, we created the variables pchildduty and pesonduty(dummy variables that equal one if the respondent agrees (or tends to agree) with views (a)and (b), respectively), and added them to equation (1). If individuals behave according toJapanese social norms and traditions, we would expect pchildduty to increase the probabilityof the parents living with the eldest son or with a child other than the eldest son and pesonduty
to increase the probability of the parents living with the eldest son.9
It is possible that parents tend to live with their eldest son not because of social norms
but because the eldest son is likely to be the first to marry and purchase a house, meaning thatparents will be able to coreside longer (and reap more benefits) if they coreside with theireldest son.

Similarly, parents may choose to live with their eldest son even if they have adaughter who is older than their eldest son not because of social norms but because Japanesewomen tend to marry older men to a greater extent than Western women, meaning that theissue of coresidence is likely to arise earlier in the case of their husband’s parents than in thecase of their own parents.

This argument can explain why eldest sons are more likely to livewith their parents (even if there is a daughter who is older than the eldest son) but does not
explain why parental attitudes towards their children affect their probability of living with
their children.

(V) Control Variables
Finally, we discuss the control variables we included.

First, we included the following

variables relating to the parents: psingle (a dummy variable that equals one if there is only one

14parent), phealth (a dummy variable that equals one if one or both parents are unhealthy), page(the age of the parent if there is only one parent and the average age of the parents if there are
two parents), hretired (a dummy variable that equals one if the father (the mother if there is nofather) is currently retired), and hpartunempl (a dummy variable that equals one if the father(the mother if there is no father) was a part-time worker or unemployed before retirement.
Next, we included four control variables relating to the composition of children: eson (adummy variable that equals one if there is an eldest son), edaughter (a dummy variable that
equals one if there is an eldest daughter), oson (a dummy variable that equals one if there is atleast one son other than the eldest son), and odaughter (a dummy variable that equals one if
there is at least one daughter other than the eldest daughter).10
In addition, we included the following variables relating to the marital status of thechildren: In sample (i), we included esingle (a dummy variable that equals one if the eldest
child is single), edivorce (a dummy variable that equals one if the eldest child is divorced),ksingle (a dummy variable that equals one if at least one child other than the eldest child issingle), and kdivorce (a dummy variable that equals one if at least one child other than theeldest child is single); in sample (iv), we included only esingle (a dummy variable that equals
one if the only child is single) and edivorce (a dummy variable that equals one if the only childis divorced); in sample (ii), we defined esingle as a dummy variable that equals one if theeldest son is single, edivorce as a dummy variable that equals one if the eldest son is divorced,
ksingle as a dummy variable that equals one if at least one child other than the eldest son issingle, and kdivorced as a dummy variable that equals one if at least one child other than theeldest son is single; and in sample (iii), we defined esingle as a dummy variable that equals
one if the eldest daughter is single, edivorce as a dummy variable that equals one if the eldest
daughter is divorced, ksingle as a dummy variable that equals one if at least one child otherthan the eldest daughter is single, and kdivorced as a dummy variable that equals one if at least
one child other than the eldest daughter is divorced;
Finally, we included the following variables relating to the ages of the children: In
sample (i), we included eage (the age of the eldest child) and kage (the average age of children

15other than the eldest child); in sample (iv), we included eage (the age of the only child); in
sample (ii), we defined eage as the age of the eldest son and kage as the average age ofchildren other than the eldest son; and in sample (iii), we defined eage as the age of the eldest
daughter and kage as the average age of children other than the eldest daughter;

5. Descriptive Statistics
Before discussing the estimation results, we present some descriptive statistics to give the reader
a general idea of the living arrangements of elderly parents and their children in Japan.

The

upper row of Table 1 shows with which child elderly parents live, and as can be seen from thisrow, 53.4 percent of elderly parents with only one child live with their child, and about 20-40
percent of elderly parents with two or more children live with their child or children.

Looking

more specifically at with which child elderly parents live, an interesting pattern emerges: ifelderly parents have an eldest son, they are much more likely to live with their eldest son than tolive with children other than the eldest son (43.7 percent vs. 13.8 percent).

Second, thepercentage of parents who live with their eldest child is only about 22.3 percent.

That is,parents are more likely to live with their eldest son even if the eldest son is not the eldest child.
This is consistent with the Japanese social norm that the eldest son should live with,his parents
and take care of them during old age.
We look next at data on sons who adopt their wives’ surname and daughters whose
husbands adopt their surname.

Such data shed light on the importance of the dynasty model

because a son who adopts his wife’s surname cannot carry on his parents’ family line, andconversely, a daughter whose husband adopts her surname can carry on her parents’ familyline.

If the dynasty model applies and parents care about perpetuating the family line, wewould not expect parents with only one son and no daughters (hereafter referred to as “singlesons”) to allow their sons to adopt their wives’ surname, and conversely, we would expect
parents with only daughters to encourage at least one of their daughters to marry a man who iswilling to adopt their surname.
Looking at the results, only 3.2 percent of sons who are only children and 2.1 percent

16

of eldest sons adopt their wives’ surnames whereas a full 12.9 percent of second-born sons andthird-born sons do so, which indicates that sons who are only children and eldest sons are farless likely to adopt their wives’ surnames.

On the other hand, 7.2 percent of daughters who

are only children, 14.6 percent of eldest daughters, and 13.3 percent of eldest daughters who
have only sisters marry a man who adopts her surname, whereas only 1.7 percent of eldest
daughters with brothers marry such a man.

Furthermore, 16.9 percent of daughters otherthan eldest daughters who have only sisters marry a man who adopts her surname, whereas
only 0.9 percent of daughters other than eldest daughters with brothers marry such a man.
Thus, households that have at least one son rarely have daughters who marry men who adopt
their surnames (because if there is at least one son, the son can carry on the family line),
whereas daughters with no brothers are much more likely to marry men who adopt theirsurnames in order to perpetuate the family line. These results are consistent with the dynasty
model because they underscore the eagerness of parents and their children to perpetuate thefamily line.

6. Estimation Results
In this section, we present our estimation results concerning the determinants of the living
arrangements (coresidence behavior) of elderly parents and their children.

Table 2 shows theresults for samples (i) and (iv), Table 3 the results for sample (ii), and Table 4 the results forsample (iii).

To conserve on space, we present only the marginal effects and standard errors ofeach coefficient.

We organize our discussion by theoretical model.

First, we discuss our estimation results pertaining to the dynasty model. Looking firstat the marginal effects of hselfempl and hprofl, our results show that the probability thatparents live with their eldest son is 7.3 (18.7) percentage points higher if the husband was a
non-professional (professional) self-employed worker before retirement than if he was asalaried worker before retirement.

Similarly, the probability that parents live independentlyis 7.1 (15.8) percentage points lower if the husband was a non-professional (professional)
self-employed worker before retirement than if he was a salaried worker before retirement.

17

These results are presumably due to the fact that self-employed households are different fromsalaried worker households in that the former have a family business that they would like topass on their children, especially their eldest son, and the child who carries on the familybusiness is more likely to live with his or her parents because he or she will inherit the familybusiness (which is often located in, or adjacent to, the family home). Thus, our result is
consistent with the dynasty model.
Turning to the marginal effects of the variables pertaining to whether or not sons adopt
their wife’s surname and whether or not daughters marry a man who adopts their surname, theresults show that the probability that parents live with their eldest son is 27.5 percentage points
lower if their eldest son adopts his wife’s surname; that the probability that parents live with
their eldest daughter is a full 46.6 percentage points higher, the probability that parents livewith a child other than the eldest daughter is 11.3 percentage points lower, and the probability
that parents live independently is 27.4 percentage points lower if their eldest daughter marries
a man who adopts her surname; and that the probability that parents live with a child otherthan their eldest daughter is 12.0 percentage points higher if a daughter other than their eldest
daughter marries a man who adopts her surname.

All of these results suggest that parents

have a strong tendency to live with children who carry on their surname, which in turnsuggests that the dynasty model is applicable in Japan.
Next, we discuss our estimation results pertaining to the selfish life cycle model.
Looking first at the marginal effect of hexecutive, our results show that the probability thatparents live with a child other than the eldest son is 7.5 percentage points higher, the probability
that parents live with the eldest daughter is 6.8 percentage points higher, and the probability thatparents live independently is 8.6 percentage points lower if the father was an executive before
retirement than if the father was a rank-and-file salaried worker before retirement.

The

children of executives, who are presumably relatively wealthy, should be more likely to livewith their parents if they are selfishly motivated and thus this finding is consistent with theselfish life cycle model (as well as with the altruism model, as discussed in section 2).
Turning to the marginal effect of phouse, our results show that the probability that18

parents live with their eldest child is 10.4 percentage points higher, the probability that parents
live with their eldest son is 17.6 percentage points higher, and the probability that parents live
independently is 14.5 to 17.9 percentage points lower if they are homeowners than if they arerenters.

The children of parents who are homeowners should be more likely to live with theirparents if they are selfishly motivated because they can enhance their chances of receiving thefamily home as a bequest by living with the parents, and thus these results are consistent withthe selfish life cycle model (as well as with the altruism model as discussed in section 2).
Turning to the marginal effect of peduc, our results show that well-educated parents are,if anything, less likely to live with their eldest child, especially their eldest son, and more likely
to live independently than less educated parents.

This result appears to be inconsistent withthe selfish life cycle model because well-educated parents are presumably relatively wealthyand selfishly motivated children should be more likely to live with their parents if their parents
are relatively wealthy. This finding is also obtained by Iwamoto and Fukui (2001), and one
possible explanation for it is that parents value their privacy and prefer to live separately fromtheir children if they are relatively wealthy and can afford to do so.
Turning to the marginal effects of pincome and hretired*pincome, the marginal effects ofthese variables are significant in only one case, indicating that parental income does not have asignificant impact on the living arrangements of parents and children. This result is also
hostile to the selfish life cycle model because selfishly motivated children should be more likely
to live their parents if their parents are relatively wealthy.
Third, we discuss our estimation results pertaining to the altruism model. Looking at
the marginal effect of eeduc, our results show that parents are less likely to live with their eldest
child or eldest son and more likely to live independently if their eldest child or eldest son iswell-educated.

Moreover, the marginal effects of keduc show that parents are more likely tolive with their eldest child and also more likely to live independently if their other children are
well-educated. These results are consistent with the altruism model because education is agood proxy for earnings capacity and altruistic parents should show a tendency to leave a larger
bequest to (and live with) less educated (poorer) children than with better educated (wealthier)19children but are also consistent with the selfish life cycle model, as noted in section 2.
However, the marginal effect of psacrifice is not significant in any case except in thecase of respondents with only one child, which constitutes evidence against the altruism model.
Finally, the fact that the impact of a number of variables relating to the dynasty and selfish life
cycle models were found to be significant and consistent with these models constitutes further
evidence against the altruism model.
Fourth, we discuss our estimation results pertaining to Japanese social norms andtraditions. Looking first at the marginal effects of variables pertaining to parental attitudes
towards their children, the marginal effect of pchildduty imply that the probability that parents
live independently is as much as 7.2 percentage points lower if they feel that children should
live with their parents when the parents become old and cannot take care of themselves than ifthey do not hold this view. Second, the marginal effect of pesonduty implies that theprobability that parents live with the eldest son is 6.1 percentage points higher and theprobability that parents live with children other than the eldest son is 4.3 percentage points
lower if parents feel that it is an eldest son’s duty to take care of his parents than if they do nothold this view.

Both of these results suggest that Japanese social norms and traditions

influence the coresidence decisions of Japanese parents.
We next look at the marginal effect of elderson, which sheds further light on theimportance of social norms.

If there is a social norm that parents should live with their eldest

son, the probability that parents live with their eldest child should be significantly higher andthe probability that parents live with children other than the eldest son and the probability thatparents live independently should be significantly lower if the eldest child is a son, and theresults using sample (i) confirm these results: the former probability is 24.3 percentage points
higher and the second and third probabilities are 16.4 and 7.1 percentage points lower if theeldest child is a son.

Moreover, if there is a social norm that parents should live with theireldest son, they should live with the eldest son regardless of whether the eldest son is theeldest child, and thus elderson should not have a significant impact on the probability thatparents live with their eldest son and this expectation is confirmed in the results using sample

20

(ii).
Finally, we discuss the impact of the control variables.

The marginal effects of psingle

show that the probability that parents live with their children is as much as 11.9 percentage
points higher and that the probability that parents live independently is as much as 17.2
percentage points lower for single-parent households than for two-parent households, whichsuggests that single parents are more likely to live with their children than two-parent
households. These are plausible results because, in two-parent households, the parents can takecare of one other, whereas a single parent does not have this option and hence will be more
likely to require the assistance of his/her children.
To summarize our findings in this section, the living arrangements (co-residence
behavior) of elderly parents and their children in Japan are consistent in part with all four
explanations considered (the dynasty model, the selfish life cycle model, the altruism model,
and social norms and traditions) but most strongly support the life cycle and dynasty models(both of which assume selfishly motivated parents) and social norms and traditions and provide
the least support for the altruism model.

7. Conclusion
In this paper, we analyzed the determinants of the living arrangements (coresidence behavior)of elderly parents and their children (whether elderly parents live with their children, and if so,with which child) in Japan using micro data from the 1998 “National Family Survey (inJapanese, Kazoku ni tsuiteno Zenkoku Chousa),” which was conducted in January 1999 andprovided by the National Family Research of Japan and the Information Center for Social
Science Research on Japan, Institute of Social Science, University of Tokyo (SSJ Data
Archive).
Our results provide support for all four explanations of coresidence behavior but
especially for the life cycle and dynasty models (both of which assume selfishly motivatedparents) and social norms and traditions: The fact that parents who were self-employed before
retirement are more likely to live with their children, the fact that parents are less likely to live21

with sons who adopt their wife’s surname, and the fact that parents are more likely to live withdaughters whose husbands adopt their surname constitute evidence in favor of the dynasty
model. The fact that parents who were (relatively wealthy) executives before retirement andparents who are homeowners are more likely to live with their children and the fact thatparents are more likely to live with less educated children constitute evidence in favor of theselfish life cycle model (or the altruism model). And the fact that parental attitudes toward
their children affect their coresidence behavior, the fact that parents are more likely to livewith their eldest child if their eldest child is a son, and the fact that parents are most likely tolive with their eldest son even if he is not the eldest child constitute evidence in favor of social
norms and traditions.
Turning to a comparison of our results with those of previous studies, our results are
consistent with the results of Ohtake (1991), Ohtake and Horioka (1994), Horioka, et al.
(2000), Iwamoto and Fukui (2001), Yamada (2006), and Kureishi and Wakabayashi (2007) inthat we find that the coresidence behavior of parents and children in Japan is in part selfishly
motivated.11

Moreover, our results are consistent with the results of Ando, et al. (1986) andIwamoto and Fukui (2001) in that we find that the coresidence behavior of parents andchildren in Japan is partly motivated by a desire to perpetuate the family business.

Finally,

our results are consistent with Martin and Tsuya (1991) and Tsuya and Martin (1992) in that
we find that the coresidence behavior of parents and children is influenced by social norms.
However, as far as we know, our study is the first to simultaneously test for the applicability of
the four possible explanations of the coresidence behavior of parents and children in Japan,
and this was made possible by our richer data set, which includes detailed information on
siblings and parental attitudes towards their children.
We turn finally to directions for further research.

The survey we use in our analysis

collects information on family structure and sibling composition, making it ideal for the
purposes of the analysis here, but information on many socioeconomic characteristics (forexample, the financial assets of parents and children, the income of each child, transfers fromparents to each child and vice versa, etc.) is not available.

22

One direction for further research

is to find a data source that includes information on these variables so that we can do a more
rigorous analysis, especially of the selfish life cycle model.
Another shortcoming of our analysis is that we used attitudinal data without taking
account of the possibility that respondents may try to justify their own behavior when
responding to attitudinal questions. Finding a way to eliminate the bias caused by thisproblem is another possible avenue for further research.
Turning finally to the policy implications of our findings, our finding that the living
arrangements (coresidence behavior) of elderly parents and their children is in part selfishly
motivated suggests that the selfish life cycle model applies in Japan to at least some extent,
and this, in turn, implies that the aging of the population will cause Japan’s household savingrate to decline because elderly parents will not need to save in order to leave unrequited
bequests to their children.

Moreover, this, in turn, may cause interest rates in Japan to rise

unless the decline in household saving is fully offset by increases in corporate and/or
government saving and/or increases in capital inflows from abroad.

23

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27

Table 1: Descriptive Statistics
Sample (i)Sample (ii)

Sample (iii)
Parents with two or
Parents with two or
Parents with two or
more children andmore children andmore children (1373with at least one
with at least one son
observations)
daughter (1060(1125 observations)observations)

Sample (iv)
Parents with only
one child (279observations)

Respondents livewith eldest child/son/daughter/child

295 (21.49)

492 (43.73)

239 (22.55)

with other children

368 (26.80)

155 (13.78)

254 (23.96)

149 (53.41)-

with both143 (10.42)

28 (2.49)

132 (12.45)-

independently

567 (41.30)

450 (40.00)

435 (41.04)

130 (46.59)
36 (12.90)

Father's occupation
hexecutive

159 (11.58)

129 (11.47)

122 (11.51)

hprofl26 (1.89)

20 (1.78)

20 (1.89)

4 (1.43)

hselfempl

317 (23.09)

264 (23.47)

243 (22.92)

38 (13.62)

hsalaried

674 (49.09)

550 (48.89)

520 (49.06)

163 (58.42)

hpartunemp

197 (14.35)

162 (14.40)

155 (14.62)

38 (13.62)

hretired843 (51.03)555 (49.33)

520 (49.06)

157 (56.27)

essurname16 (1.17)

24 (2.13)

edsurname41 (2.99)-

47 (4.43)

20 (7.17)

ossurname45 (3.28)

145 (12.89)

30 (2.83)-

odsurnamepeduc*
pincome* (million yen)-

9 (3.23)

24 (1.75)

38 (3.38)

49 (4.62)

11.20 (1.96)

11.18 (1.97)

11.20 (1.97)

11.47 (1.90)

4.82 (3.98)

4.81 (4.05)

4.85 (4.03)

4.33 (3.79)

1,221 (88.93)

1,003 (89.16)

947 (89.34)

229 (82.08)

eeduc* (years)

13.72 (1.96)

13.98 (2.12)

13.34 (1.67)

13.76 (2.08)

oeduc* (years)

13.59 (1.84)

13.60 (1.87)

13.77 (1.91)

phouse-Parents attitude towards their children
psacrifice866 (63.07)

717 (63.73)

666 (62.83)

171 (61.29)

pchildduty

870 (63.36)

731 (64.98)

667 (62.92)

182 (65.23)

pesonduty

618 (45.01)

542 (48.18)

479 (45.19)

113 (40.50)

psingle275 (20.03)

232 (20.62)

215 (20.28)

88 (31.54)

phealth713 (51.93)

597 (53.07)

561 (52.92)

143 (51.25)

esingle292 (21.27)

338 (30.04)

202 (19.06)

105 (37.63)

emarriage

165 (59.14)

Children's marriage condition
1,031 (75.09)

760 (67.56)

815 (76.89)

edivorce

50 (3.64)

27 (2.40)

43 (4.06)

osingle499 (36.34)341 (30.31)

391 (36.89)-

omarriage

964 (70.21)

850 (75.56)

756 (71.32)-

9 (3.23)

odivorce

50 (3.64)

53 (4.71)

38 (3.58)

page* (years old)

64.72 (6.75)

64.75 (6.77)

64.69 (6.69)

64.11 (8.36)
36.42 (9.70)

eage* (years old)

39.30 (7.46)

37.97 (7.78)

37.90 (7.75)

kage* (years old)

35.41 (7.54)

36.60 (7.63)

36.51 (7.61)

elderson714 (52.00)

714 (63.47)

401 (37.83)-

150 (53.76)

Data source: The 1998 "National Family Survey (in Japanese, Kazoku ni tsuiteno Zenkoku Chousa), " conducted by National Family
Research of Japan
Notes: Refer to the main text for variable definitions. The first figure indicates the number of observations and the second figure (inparentheses) denotes the share of the total sample (except where otherwise noted). hsalaried is a dummy variable that equals one if thehusband was a rank-and-file salaried worker before retirement.
*The first figure denotes the mean and the second figure (in parentheses) denotes the standard deviation.

28

Table 2: Estimation Results for Samples (i) and (iv) (Marginal Effects)
Sample (iv) (279 obs.)

Sample (i) (1373 observations)

Dependent variable

Parents live Parents live with Parents live with
Parents live Parents live with theirwith their children other than both their eldest
independently only child (=1) or live
eldest child their eldest child
child and otherindependently (=0)
(=4)
(=1)
(=2)
children (=3)(i)

hselfempl
hproflessurnameedsurnameossurnameodsurnamehexecutive
peducphousepincomehretired*pincome
eeduc
keduc
psacrificepchildduty
pesonduty
eldersonpsingleeson
edaughteroson
odaughter

0.027(0.027)0.126(0.082)-0.102(0.082)0.411 ***
(0.068)0.138 **
(0.060)-0.218 ***(0.009)0.004(0.036)-0.018 ***(0.006)0.104 ***
(0.028)-0.004(0.003)-0.007(0.007)-0.016 ***(0.006)0.014 **
(0.007)-0.007(0.021)
0.035(0.023)0.016(0.022)0.243 ***
(0.027)0.036(0.028)-0.069(0.053)-0.003(0.031)
0.032(0.033)0.073 *
(0.042)

(ii)

(iii)

0.012
(0.030)0.023(0.081)-0.009(0.112)-0.160 ***(0.045)0.061(0.084)0.237 **
(0.103)0.045(0.039)-0.001(0.007)0.048(0.033)0.002(0.004)0.002(0.006)-0.003(0.007)-0.008(0.007)0.036(0.023)0.022(0.024)-0.019(0.025)-0.164 ***(0.029)0.119 ***
(0.033)0.114 **
(0.033)0.059(0.036)0.008(0.036)-0.021(0.034)0.027(0.445)-0.048(0.044)-0.105 ***(0.006)0.061(0.056)0.006(0.072)0.281 ***
(0.094)0.008(0.023)0.000(0.004)0.026(0.017)0.001(0.002)0.009 **
(0.004)0.002(0.004)-0.020 ***(0.004)0.003(0.014)0.015(0.015)0.003(0.015)-0.007(0.018)-0.001(0.018)0.015(0.024)0.046 **
(0.018)0.028(0.021)
0.008(0.023)(iv)-0.065 **(0.032)-0.101(0.079)0.216 *
(0.125)-0.312 ***(0.046)-0.206 ***(0.064)-0.300 ***(0.058)-0.057(0.040)0.018 **
(0.007)-0.178 ***(0.039)0.001(0.004)-0.004(0.007)0.017 **
(0.008)0.014 *
(0.008)-0.032(0.025)-0.072 ***(0.027)0.000(0.027)-0.071 **(0.033)-0.154 ***(0.033)-0.060(0.052)-0.101 **(0.044)-0.068 *(0.041)-0.059(0.042)(v)
0.157(0.103)0.159(0.229)0.458 ***
(0.050)0.111(0.108)-0.015(0.023)0.143(0.100)-0.008(0.013)0.022(0.025)-0.033(0.021)0.128 *
(0.075)0.121(0.083)-0.076(0.080)0.126(0.090)0.064(0.079)-

Data source: The same as Table 1.
Notes: The figures represent marginal effects evaluated at the sample mean and their standard errors.
The results for sample (i) were estimated using a multinomial logit model, while the results for sample (iv) were estimatedusing a logit model.
We used the STATA command margeff8, which analytically estimates marginal effects and standard errors for marginal
effects using the delta method.
phealth, hretired, hpartunemp, page, eage, kage, esingle, edivorce, ksingle, kdivorce, and a constant term were included in
specifications (except that kage , ksingle , and kdivorce were not included in the results for sample (iv)), but theircoefficients were suppressed.
* denotes significant at the 10% level, ** denotes significant at the 5% level, and *** denotes significant at the 1% level.

29

Table 3: Estimation Results for Sample (ii) (Marginal Effects)
Sample (ii) (1125 observations)
Dependent variable

Parents live with
Parents live with
Parents live
Parents live withchildren other than both their eldest son
independently
their eldest son
and other children
their eldest son
(=4)
(=1)
(=3)
(=2)
(ix)
(viii)(vii)(vi)

hselfempl
hproflessurnameedsurnameossurnameodsurnamehexecutive
peducphousepincomehretired*pincome
eeduc
keduc
psacrificepchildduty
pesonduty
eldersonpsingleedaughteroson
odaughter

0.073 *
(0.038)0.187 *
(0.098)-0.275 ***(0.090)-0.045(0.131)
0.062(0.055)0.404 ***
(0.066)0.013(0.050)-0.023 ***(0.008)0.176 ***
(0.040)-0.002(0.005)0.008(0.008)-0.037 ***(0.009)0.001(0.011)
0.007(0.029)0.040(0.032)
0.061 *
(0.031)
0.075(0.055)0.114 ***
(0.039)0.011(0.067)0.038(0.058)0.014(0.048)0.013(0.026)-0.004(0.073)0.042(0.073)0.021(0.099)0.030(0.037)0.027(0.065)0.075 **
(0.036)-0.002(0.005)-0.034(0.031)
0.002(0.003)-0.001(0.005)0.003(0.006)0.004(0.007)0.028(0.019)0.029(0.020)-0.043 **(0.021)
0.053(0.035)0.065 **
(0.028)0.025(0.030)-0.001(0.033)0.033(0.038)

Data source: The same as Table 1.
Notes: The same as Table 2.

30-0.014(0.010)-0.026 ***(0.004)0.023(0.041)0.104 *
(0.063)0.021 ***
(0.005)-0.026 ***(0.004)-0.002(0.014)-0.001(0.003)0.003(0.014)0.001(0.002)-0.005(0.004)0.004(0.004)-0.001(0.005)-0.006(0.010)0.001(0.010)-0.016(0.010)-0.078(0.076)-0.006(0.012)-0.002(0.083)-0.013(0.011)-0.014(0.010)-0.071 **(0.036)-0.158 **(0.077)0.209 **
(0.094)-0.080(0.144)-0.113 **(0.055)-0.406 ***(0.013)-0.086 **(0.042)0.025 ***
(0.008)-0.145 ***(0.044)-0.001(0.004)-0.001(0.008)0.030 ***
(0.009)-0.004(0.010)-0.030(0.028)-0.070 **(0.031)-0.003(0.030)-0.050(0.060)-0.172 ***(0.036)-0.034(0.065)-0.024(0.058)-0.032(0.043)

Table 4: Estimation Results for Sample (iii) (Marginal Effects)
Sample (iii) (1060 observations)
Dependent variable

Parents live with
Parents live with
Parents live withchildren other thanboth their eldest
their eldest
their eldest daughter daughter and otherdaughter (=1)(=2)
children (=3)

hselfempl
hproflessurnameedsurnameossurnameodsurnamehexecutive
peducphousepincomehretired*pincome
eeduc
keduc
psacrificepchildduty
pesonduty
eldersonpsingleeson
oson
odaughter

Parents live
independently
(=4)

(x)
-0.001(0.025)-0.179 ***(0.044)-0.064(0.063)0.466 ***
(0.067)0.011(0.111)0.029(0.045)(xi)
0.016(0.031)0.087(0.079)-0.015(0.101)-0.113 **(0.044)0.056(0.115)0.120 **
(0.058)

(xii)
0.011
(0.020)0.175 ***
(0.047)-0.080 *(0.044)-0.079 *(0.041)0.148 **
(0.048)-0.047(0.065)(xiii)-0.026(0.036)-0.083(0.083)0.159(0.108)-0.274 ***(0.052)-0.215 **(0.101)-0.101(0.063)0.068 *
(0.035)0.000(0.006)0.040(0.028)0.003(0.003)-0.002(0.005)-0.006(0.006)-0.004(0.006)0.011(0.020)0.031(0.020)-0.028(0.021)-0.013(0.032)0.029(0.027)-0.080 **(0.033)-0.010(0.027)-0.048(0.031)-0.024(0.042)0.000(0.007)0.076 **
(0.032)0.002(0.004)0.002(0.006)0.002(0.008)-0.019 ***(0.007)0.017(0.024)-0.010(0.026)0.035(0.026)-0.307 ***(0.028)0.074 **
(0.033)0.132 ***
(0.031)0.103 **
(0.042)0.047(0.033)-0.016(0.031)-0.012 **(0.005)0.063 ***
(0.024)-0.005(0.003)0.007(0.006)-0.001(0.006)-0.010 **(0.004)-0.017(0.017)0.010(0.019)0.020(0.019)0.399 ***
(0.045)0.069 ***
(0.024)0.012(0.018)-0.012(0.018)0.030(0.030)-0.028(0.047)0.012(0.008)-0.179 ***(0.043)0.000(0.005)-0.008(0.008)0.006(0.010)0.034 ***
(0.008)-0.011(0.028)-0.031(0.030)-0.027(0.030)-0.079(0.049)-0.172 ***(0.037)-0.065(0.052)-0.082 *(0.043)-0.029(0.042)

Data source: The same as Table 1.
Notes: The same as Table 2.

31

Endnotes
1

By contrast, Ando, et al. (1986) and Hayashi (1997) find that parental assets lower the probabilityof coresidence.
effects:

The conflicting results are presumably due to the presence of two conflicting

To the extent that parents value their privacy, they will want to live apart from theirchildren if they can afford to do so, and thus parental wealth will have a negative impact on theprobability of coresidence. By contrast, to the extent that greater parental wealth will induce theirchildren to live with them, parental wealth will have a positive impact on the probability ofcoresidence. The net effect of parental wealth will thus depend on the relative strengths of these
two effects.
2

There are some studies for countries other than Japan that analyze living arrangements andcaregiving in the case of multiple children (e.g., Hoerger, et al. (1996), Hiedmann and Stern (1999),
Checkovich and Stern (2002), Engers and Stern (2002), and Konrad, et al. (2002)). For example,
Konrad, et al. (2002) analyze the residential location decisions of children in Germany and findevidence that German children are altruistic toward their parents but that the first-born child
exploits his or her first-mover advantage by locating far from his or her parents in order to shift theburden of caring for them to his or her younger siblings.
3

It is true that dropping respondents with four or more children will lead to sample selection bias,

especially since those with four or more children are likely to belong to an earlier cohort and havemore traditional values, as pointed out by an anonymous referee, but we do not believe that thisbias will be all that serious because we control for the age of parents and because those with fouror more children compromise only 5.3 percent of the total sample.
4

We use the mfx88 command in STATA to calculate the marginal effect of multinomial logit

models.
5

We did not include ossurname or odsurname in the sample of respondents with only one child for

obvious reasons and we did not include essurname in this sample either because there was only
one observation for which the value of this variable was one, meaning that its coefficient could not
be estimated.
6

The incomes of the working elderly and the retired elderly will not be directly comparable

because the incomes of the working elderly will be higher as a ratio of their lifetime incomes than
the incomes of the retired elderly.

In order to control for this, we included the cross-product ofhretired (a variable that equals one if the father (the mother if there is no father) is retired) andpincome in addition to pincome.
7

Note, however, that hexecutive, peduc, and pincome are all proxies for parental income, which is

not necessarily a bequeathable asset. By contrast, phouse does not suffer from this drawback
because housing is almost always bequeathed to one’s children in Japan.
8

However, as Behrman, Pollak, and Taubman (1982) have shown, it is theoretically possible that32

parental preferences will be such that transfers to their children will be reinforcing rather thancompensating.
9

Because of the possibility that there is multicollinearity among the proportions of respondents

adhering to the three views, we checked for this possibility and obtained the following results: thecorrelation between the probability of respondents adhering to views (a) and (b) is 0.195, thatbetween the probability of respondents adhering to views (a) and (c) is 0.266, and that between theprobability of respondents adhering to views (b) and (c) is 0.384. Thus, the correlation between
the proportions of respondents adhering to views (b) and (c) is the highest, but even this correlation
is not overwhelmingly high.
10

We did not include eson in the sample of respondents with multiple children including at least

one son or edaughter in the sample of respondents with multiple children including at least one
daughter because they equal one for all observations in these samples.

Moreover, we included

only eson in the sample of respondents with only one child.
11

Dekle (1990) reaches the same conclusion (that the Japanese are selfish) by showing that the

number of living children does not have a significant impact on the saving behavior of the elderly
in Japan, which suggests that they do not have a bequest motive.

33