Intra-familial transfers, son preference, and retirement behavior in South Korea

Abstract:

We consider the nexus of intra-familial transfers, the sex composition of the sibship, and parental retirement behavior in South Korea. To investigate this, we employ the Korean Longitudinal Study of Aging and a research design that relies on plausibly exogenous variation in the sex composition of the sibship. We provide evidence that it costs more to raise sons than daughters in South Korea, particularly for older cohorts. Thus, in the absence of sufficient transfers from adult sons to parents, parents will fund their earlier investments in their sons by increasing their labor supply. Consistent with this, we show that parents with more adult sons are more likely to delay their retirement. In particular, a father with all sons has a probability of being retired that is 5.5–6.0 percentage points lower than a comparable father with all daughters. Fathers also work 16.8 percent more hours per week when their sibship consists of all sons. These effects are the most pronounced for poorer households and for older cohorts.

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