Intergenerational Transfers in Latin American Countries

Guido Pinto, University of Wisconsin at Madison
Rebeca Wong, University of Texas Medical Branch
Jason R. Thomas, University of Wisconsin at Madison

The main purpose of this paper is to test alternative theories of intergenerational support using data from the Latin American and Caribbean region. We use data from the SABE surveys carried out in seven large cities in Latin America and the Caribbean, MHAS a two wave study of elderly in Mexico, and PREHCO a two wave study of elderly Puerto Ricans. We propose two sets of models. The first set of models examines only transfers from non-coresident children to parents using a simultaneous system of three equations for (a) intergenerational coresidence, (b) elderly labor force participation and (c) transfers (goods, services, money) from non coresident children to parents. The second set of models formalizes simultaneously exchanges from parents to children and from children to parents using a biprobit model. The results of our estimation are much more consistent with altruistic theories than with exchange theories.