European Economic Perspectives 25

You Never Visit

Once children have left home, what influences how close to their parents they decide to live? Some CEPR researchers have used economic analysis to explore this unusual question.

Children usually like their parents. They care for them and like to visit them and socialize with them. But parents’ desire for their offspring’s attention typically exceeds the children’s desire for such activities. This can lead to strategic decision-making if parents have more than one child. If there are several children to visit one set of parents, each child may like it if their parents get a lot of attention. But each child will also prefer a greater share of this attention to be paid by their brothers and sisters.

So how do children shift the ‘burden’ of visiting parents to their siblings? A recent CEPR Discussion Paper by Kai Konrad, Harald Künemund, Kjell Erik Lommerud and Julio Robledo suggests that the location choice of siblings vis-à-vis their parents plays a strategic role. If parents have several children who decide to live in places at different distances from them, it seems likely that the children living closest to their parents will visit them more frequently and pay them more attention than others. This is primarily because the cost of time and travel for each single visit is higher the greater the distance between the parents’ and the child’s place of residence.

If location plays a major role in determining which child visits his or her parents and how frequently, then children can influence their own future visiting behaviour by their decision as to where to live. Even more importantly, because siblings can observe each other’s location choices, they can make inferences about each other’s visiting. They can adjust and increase their own attention to compensate for any lack of attention their siblings give to their parents. And children can even affect their siblings’ visiting behaviour by their own location choice.

Clearly, the strategic situation is very complicated. Konrad and his colleagues characterize the various ‘equilibrium’ location choices that are likely to emerge. All these choices have one thing in common. When making their location choice, children with siblings have more of a strategic incentive to move further away than an only child has. A child with siblings can hope that, by moving further away, he or she may be able to shift some of the burden of taking care of their parents to their brothers or sisters. An only child can have no such hopes.

Hence, the researchers derive a testable hypothesis from the theoretical analysis: children with siblings should, on average, locate further away from their parents than only children. They also derive a second hypothesis about equilibrium outcomes in families with exactly two children. In such families, their model predicts a very particular location pattern: that one child stays with the parents whereas the other child moves far away from the parents, ‘sufficiently’ far to shift the burden of providing care for the parents to the other child.

In testing the first hypothesis, it turns out that children with siblings do indeed locate further away from their parents than do only children. The difference is significant, even controlling for various socio-demographic variables. What is more, there are indeed substantial numbers of siblings from two-child families who behave according to the second hypothesis: one child stays with the parents while the other child moves ‘sufficiently’ far away.

Of course, the strategic incentive to move further away generates what game theorists call a ‘prisoner’s dilemma’ problem, where the outcome is the worst of all possible worlds – in this case, that some siblings move ‘too far’ away from their parents. Their choice of a greater distance is made to ensure that the burden of parental care is shifted firmly onto their brothers and sisters. But if all the children in the family could cooperatively decide on their locations, they would typically make different choices and, on average, would locate closer to their parents. These results highlight the important role of social norms in overcoming such strategic problems. Such norms exist in some countries, such as Japan, but seem to be on the retreat.

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