Social and Economic Dimensions of an Aging Population


Vol. 2 No. 2

Summer 2000

SEDAP (Social and Economic Dimensions of an Aging Population) is a multidisciplinary research program studying a wide range of aging-related issues and is funded by the Social Sciences and Humanities Research Council of Canada. SEDAP is centred at McMaster University and involves researchers from that institution as well as from the University of British Columbia, Université de Montréal, Queen's and the University of Toronto.

I. SEDAP Conference

SEDAP will host a conference at McMaster University on Thursday, November 9, 2000. The conference is provisionally titled "Macroeconomic Aspects of an Aging Population" and papers will address both international and federal-provincial consequences of aging, issues in modeling overlapping generations, and topics such as financial market implications of aging, and work sharing. Further information is available from Prof. William Scarth, Department of Economics, McMaster University, Hamilton, Ont. L8S 4M4, .

II. SEDAP Research Papers

SEDAP Research Papers are available on the SEDAP website ( at no cost. Paper copies may be obtained for a nominal charge. Please contact Mrs. Gail Kalika, Department of Economics, KTH-426, McMaster University, Hamilton, Ont., Canada, L8S 4M4.

Brief descriptions follow of the most recently released papers in the SEDAP series.

SEDAP Research Paper No. 17:

Location of Adult Children as an Attraction for Black and White Elderly Migrants in the United States

Kao-Lee Liaw (Geography, McMaster University), William H. Frey (Center for Social and Demographic Analysis, SUNY-Albany) and Ji-Ping Lin (Institute of Economics, Academia Sinica, Taipei)

The idea that the location of adult children can be influential in attracting elderly migrants within an industrialized country was explored by Litwak in 1960 in his work on the theory of the modified extended family. However, empirical studies to explore such theories are rare, given the difficulties in finding data sets with information on the location of non-coresident children.

Liaw, Frey and Lin propose a method to address such data difficulties by creating a proxy variable for the location of the adult children of elderly "natives" (i.e., the elderly whose 1985 state of residence was identical to their state of birth, as reported in the 1990 U.S. census). To create the proxy variable, use is made of data on race-specific birth-to- 1985 out-migration patterns of individuals in the 30-59 age group for each state. Incorporating this proxy along with other explanatory variables, the authors examine 1985- 1990 U.S. interstate migration of elderly (aged 60+) black and white natives.

Their results show that both married and unmarried elderly natives were strongly attracted by their adult children, with the attraction stronger for the widowed elderly. The elderly were more prone to remain in the states where a high proportion of their adult children had remained. Elderly migrants were more prone to move to states where a high proportion of their migrated adult children were located, and this tendency was somewhat stronger for those who were widowed and aged 75 and over.

The authors also note the difference between black and white migration rates, with whites being markedly more likely to migrate. They suggest this difference can be partly accounted for by the fact that elderly blacks had lower education attainments and were more likely to be in poverty. They also point out that the difference could be related to the fact that a high proportion of black adult children had migrated from the sunbelt to the industrial states of the snowbelt, whereas a high proportion of white adult children had migrated in the opposite direction. Thus the attractions of adult children and environmental amenities countered each other for elderly blacks and reinforced each other for elderly whites.

SEDAP Research Paper No. 18:

The Nature of Support from Adult Sansei (Third Generation) Children to Older Nisei (Second Generation) Parents in Japanese Canadian Families

Karen M. Kobayashi (SEDAP Postdoctoral Fellow, School of Social Work and Family Studies, University of British Columbia)

In this paper, Kobayashi examines the presence and frequency of emotional, financial and service support from adult children (third generation) to their parents (second generation) in Japanese Canadian families. Specifically, she seeks to test the hypothesis that Japanese Canadian adult children have retained certain traditional cultural values that make them more apt than the Canadian population at large to provide support to their aging parents.

The author conducted interviews with 100 older (age 55-80) second generation Japanese Canadian parents and 100 of their third generation adult children (age 30-50), where all interviewees were B.C. residents. The sample was drawn randomly from a list of over 10,000 names obtained from subscription lists of Japanese Canadian publications. If the randomly selected individual was a parent (child), that parent (child) selected the child (parent) to be interviewed.

Comparing the adult children in this study with the Canadian population at large, over 90% of the adult children surveyed here do not provide financial support to either of their parents, while 100% of the matched 1985 General Social Survey (GSS) sample report that they do not donate money to either of their parents. About 30% of adult children in this study provide help with household duties to mothers and 15% to fathers. This is in contrast to the 1996 GSS in which nearly 87% of the matched respondents do not provide such assistance to mothers and over 95% do not provide such assistance to fathers.

Regression results on the author's survey data show that Japanese Canadian adult children's feelings of filial obligation have an effect on the provision and frequency of emotional support to their parents. There is also a significant interaction effect between feelings of filial obligation and the parents' socio-economic status on the provision of financial support. The effects of parents' health and marital status on the provision of service support and of parents' socio-economic status on the provision of service and financial support are also found to be significant.

The author cautions that findings in this study should be interpreted in light of limitations such as a cross-sectional research design, reliance on self-reported data for some measures and the non-random selection of dyad completers (either parents or children).

SEDAP Research Paper No. 19:

The Effect of Drug Subsidies on Out-of-Pocket Prescription Drug Expenditures by Seniors: Regional Evidence from Canada

Thomas F. Crossley (Economics, York University), Paul Grootendorst (Clinical Epidemiology and Biostatistics, McMaster University), Sule Korkmaz (Economics, McMaster University) and Michael R. Veall (Economics, McMaster University)

In this paper, the authors evaluate some of the redistributive aspects of public drug plans for seniors by examining the effects on out-of-pocket expenditures under various provincial plans. Between 1970 and 1986, all Canadian provinces introduced subsidy programs for prescription drug use by seniors (age 65+). Since then, various adjustments have been made to these programs, most notably involving increases in the level of copayments and deductibles.

Prescription drug expenditure data are available in multi-year intervals over the period 1969 to 1996, thus enabling the authors to examine drug expenditures both before and after the implementation of these subsidy programs. Expenditure data used in this study are from the Family Expenditure Survey (FAMEX), reported as the total for the household. Households are divided by the authors into senior (with head and spouse if present age 65 and over) and non-senior. All expenditures are converted to 1992 dollars using the Consumer Price Index.

The FAMEX data show that in 1969 (before the introduction of drug plans for seniors), prescription drug expenditures were about $200 for both senior and non-senior Canadian households. For both these groups, such expenditures had fallen to less than $100 in 1984 (when many plans were at their most generous) but have risen subsequently, particularly for seniors.

Analysis by region (Atlantic, Quebec, Ontario, Prairies, B.C.) shows that between 1969 and 1986 as more drug subsidies for seniors were introduced, the fall in absolute prescription drug expenditures and in the fraction of household expenditure spent on prescription drugs (the budget share) was sharp for both high income and low income senior households for almost all regions. As provincial plans moved toward higher copayments and deductibles in the late 1980s and the 1990s, this fall was reversed, particularly for high income seniors.

The authors conclude that the introduction of a prescription drug plan changes the relationship between out-of-pocket prescription drug expenditures and income and that the changes are different across plans. The introduction of a subsidy tends to reduce absolute prescription drug expenditures much more for high income households than for low income households although low income households typically have a greater reduction in budget share. This evidence suggests that, on balance, prescription drug subsidies would be less effective as a means of income redistribution than a fixed per household transfer program of equal cost and would be somewhat more redistributive than a program of equal cost featuring cash transfers equal to a fixed percentage of a household's income.

editor: Deb Fretz -
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Last revised: Sept 29, 2000.