要旨

We examine the effects of public pensions on the residential choice of a child, who is altruistic, and provides the aged parent with attention as well as financial support in two ways: income transfers and contribution to family public goods. We find that, even if the child lives with the parent in a same home under a certain level of public pensions, the child chooses to move away from the parent as the level of public pension rises. When the child moves, both the parent's and child's welfare may decrease. Nevertheless, the optimal level of public pensions is positive under reasonable parameter values in the social welfare function.

JEL: H41, H55, J10