Most of the other chapters in this volume address broad public policy concerns, such as meeting the health care needs of the aged or providing old-age financial security by combining individual savings, market annuities, and public pensions. In a departure from that approach, this chapter focuses on the whole of the family transfer system that disburses privately held resources across generations of kin for many of the same purposes served by public programs. While parents provide children with a range of in-kind services, such as shared food, housing, care services, and financial assistance, both during their lifetime and by bequest, adult children often provide elderly parents with comparable resource transfers. The extent of the latter transfers vary across countries: they are normative throughout Asia (Hermalin, 1997) and Southern Europe (Glaser and Tomassini, 1999); limited and largely responsive to parental health shocks or widowhood in the United States and the United Kingdom (Wolf, 1994a; McGarry and Schoeni, 1999); and rare in Scandinavian countries. 1 Regardless of cultural, institutional, and behavioral differences across countries, however, family transfers, including emotional and affective support, are important to the well-being of older persons.
The demographic forces that give rise to aging populations also transform the structure of the family. With declines in the rates of both fertility and old-age mortality, the number of living generations in a family increases (Watkins et al., 1987) even as the number of same-generation kin declines. In silhouette, the vertically extended family evolves from the pyramid created by regimes of high fertility and mortality to the narrow, elongated family structures observed in developed countries today (Bengtson and Silverstein, 1993). The elongated family structure concentrates obligations for elder care and support among fewer kin in descending generations of a family.
In most countries, the division of labor between the public and family transfer systems is rationalized by long-standing convention, rather than by concerns for efficiency or claims of specialized competency. As a result, interactions between the two broad types of transfer systems define many of the more important policy issues for an aging population. Specifying how transfers from one system affect the flow or volume of resources from the other, however, is seldom straightforward. Increasing inheritance taxes, for example, may “repay” public transfers in the aggre
1In the poorest countries, public transfer programs are rare. Where they exist at all, such benefits are usually restricted to former government workers. Older persons have few options for transferring resources across their own life cycle through private financial markets or participation in private pensions. Surviving adult children are the singular means of insuring against the uncertainties of old age, and family transfers largely determine the well-being of older persons.