Number of children and upstream intergenerational financial transfers: evidence from Hong Kong

This study examined financial transfers from adult children to elderly parents in Hong Kong and tested three hypotheses about the motives for such transfers. We address previous research, suggesting that family financial support for retirees will decline in the coming decades as a consequence of the reduction in the fertility rate; we also examine whether financial transfers are a function of the number of adult children in the family.

We used multiple regression models based on data from a representative sample of parents aged 60 years and older to identify the correlates of the amount of transfers from adult children to their elderly parents.

We found evidence for the hypothesis that upstream transfers to elderly parents are their way of withdrawing savings from a "support bank" in which they made contribution for their children's education earlier in life and that transfers are altruistic in nature, but our results provide only moderate support to the old age security hypothesis that perceives family as a source of capital.

The number of children has a ceiling effect on transfers, which calls into question common assumptions about the extent to which the decline in fertility will pose a severe threat to the extent of familial support of older persons over the coming decades.