Intergenerational transfers and European families: Does the number of siblings matter?

Background: Existing research on intergenerational transfers has focused on income and wealth as the predominant determinants of the provision of financial assistance to adult children (Albertini, Kohli, and Vogel 2006; Zissimopoulos and Smith 2010; Albertini and Radl 2012). Yet previous models of intergenerational transfers underestimated the effect of family size due to the effect of birth order and inappropriate research design. Objective: This paper aims to more accurately describe the relationship between family size and intergenerational financial transfers in Europe. In developing a more appropriate theoretical and empirical understanding of intergenerational behaviour by borrowing findings from other areas of family studies, this paper explores the issues involved in the complex analysis of cross generational issues such as sampling, diverse and complex family forms, and unobserved family- and individual-level heterogeneity. Methods: Using multilevel methods to nest individual children in their extended families, this paper analyses data from the Survey for Health, Ageing and Retirement in Europe, and concludes that family size and birth order are essential for understanding intergenerational transfers. Logit and Tobit models are used to predict transfer occurrence and amount, and therefore avoid bias estimates found with OLS in existing research. Results: The analysis suggests that an only child is more than four times as likely to receive financial assistance as someone in a four-child family. This means that the maximum effect of family size is more than twice that of parental income. A separate and independent effect of birth order is also identified, which suggests that the oldest in a four-child family is twice as likely to receive financial assistance as their youngest sibling. Conclusions: The policy implications of this finding are significant in the context of an ageing society and demographic change, suggesting a shift in focus from financial to demographic models of intergenerational dependency. The conclusions argue for the use of multilevel modelling in the future analysis of intergenerational transfers. Doing so may help refocus intergenerational transfers research onto issues of family structure and circumstance, rather than the direct transfer of resources from one generation to the next, as described by altruistic and exchange models of transfer behaviour.