Factors in Elderly Transfers of Property to Children in Taiwan

Although economists have attempted to model intergenerational wealth transfers, empirical research on the determinants of property transfers has been much scarcer. This is not surprising, since reasonably good data on wealth or property transfers are rarely available for empirical work. Fortunately, information on property ownership and property division in the 1989 Survey of Health and Living Status of the Elderly in Taiwan provides insights into the underlying dynamics of intergenerational exchanges. Although consideration of tax benefits may prompt the division of property, counterbalancing incentives also exist to discourage division. A claim to property provides the elderly with some control over resouces, and perhaps even the amount of support and respect received from potential caretakers. In this paper we explore the demographic and social characteristics associated with pre-mortem property division in both a bivariate and multivariate context. We find that the log-odds of being in a more advanced state of property division compared to a less advanced state are generally higher if the respondent is older, illiterate, a widowed female, born in Taiwan, of rural residence, and has living sons. Most striking is the finding that widows are almost twice as likely as widowers to have divided all their property to their children. If old age security is indeed of concern to the elderly, we should not be surprised to see greater transfers going not necessarily to the oldest son, as tradition dictates, but to the person(s) most likely to provide care.

Dataset(s): Survey of Health and Living Status of the Elderly: Taiwan, 1989.