Care for Money? Mortality Improvements, Increasing Intergenerational Transfers and Time Use for the Elderly

Tobias C. Vogt, Max Planck Institute for Demographic Research
Fanny Kluge, Max Planck Institute for Demographic Research

After German reunification mortality among older East Germans converged quickly to the West German level. Simultaneously, they witnessed an 10-fold rise in pension benefits. By using this natural experiment, we seek to show, first, that increasing financial transfers from the elderly to their children led to increasing reverse transfers in care and, second, that this rise in hours spent for care led reduced old age mortality. We use poisson regression to test whether rising pensions led to an increase of hours spend on care and if this increase led to a reduction in old age mortality. We use data from the German Pension Fund and data on time use from the NTA project. Preliminary results show that since reunification intergenerational downward transfers more than doubled caused by the immense increase in pension benefits. At the same time, mortality for pensioners dropped markedly and converged to the West German level.