Upstream or Downstream Transfer behind Patrilocal Coresidence? Evidence from Three-generational Panel Data

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This paper investigates the determinants of intergenerational patrilocal coresidence in Taiwan. We hypothesize that the function of coresidence can be either upstream transfer, where children care for old-age parents, or downstream transfer, where parents care for adult chil- dren. We explore these possibilities by controlling for the characteristics of husbands, wives, parents, and children across three generations in a family. We apply panel data methods to control for unobserved, time-invariant characteristics within family, such as ability. We find evidence suggesting that coresidence could provide upstream and downstream transfers by showing that patrilocal coresidence is related with parents’ and children’s education and homeownership. We then show that only a dominant upstream transfer behind coresidence leads to a steady patrilocal coresidence rate across generations; parents who lived with the grandparents are 7% more likely to live with their adult children in Taiwan.