Who Coresides with Parents? An Analysis Based on Sibling Comparative Advantage

Sen Ma, University of Illinois at Urbana-Champaign
Fangqi Wen, Hong Kong University of Science and Technology

We analyze theoretically and empirically how elderly parents coreside with their economically independent adult children. We show that family decisions on with which child the parents coreside can be rationalized. To be specific, we find evidence suggesting division of labor among family members through the choice of coresidence. Theoretically, we show that when parents can help children with housework, they will choose to coreside with higher educated children whose opportunity cost of housework is higher. On the other hand, when parents need help from children in housework labor, they will choose to coreside with lower educated children whose opportunity cost of housework is lower. The two hypotheses are confirmed by analysis of a dataset from China containing information on parents and all of their adult children. The probability of coresidence is positively associated with relative education of the children when parents can provide help and negative when parents need help.