Private intergenerational contact in France and the demonstration effect

This study analyses motives for intergenerational contact from adult childr en to their middle-aged parents. If these transfers may be explained either by altruism or by exchange, we mainly focus on the demonstration effect wh ere households take care of their own parents in order to elicit a future s upport from their children. We test the model using a cross-sectional surve y from 1992 about private transfers in France. According to the data, the p resence of children increases the amount of visits that respondents provide to their parents and the econometric results still hold after controlling for unobserved familial heterogeneity using fixed effects. Although this em pirical evidence is consistent with the demonstration effect, we suggest an alternative interpretation for the positive correlation based on the care of grandchildren.