Intergenerational transmission in health: Does the direction of relationship change as parents age?


My (Michelle) Tran is a PhD candidate at School of Economics, University of Queensland (UQ). Michelle’s research interest includes Economics of Ageing, Economics of Education and Applied Econometrics.
Michelle’s doctoral research aims at establishing causal effects of family’s health, economic resources and aged care policies on older adults’ health and healthcare utilization. In her first year, Michelle developed a new theoretical economics model to incorporate the spillover effect from adult children to their ageing parents. Her presentation won the Winner and People Choice Awards at the 3 Minutes Thesis Competition. At the moment, Michelle is working on an identification strategy using heteroskedasticity generated instruments with application to count data.


Whilst previous studies have highlighted the influence of parents on young children's health, little evidence is available on the spillover effects from adult children to older parents. In this paper, we propose a theoretical model to explain the effect of unhealthy adult children on their older parents' health. We introduce an extension to Jacobson's theoretical model of family's health production to capture such dynamics and to provide an empirical framework to test the theory. We use the linked data on parents and children interviewed in the Panel Study of Income Dynamics (PSID). Using Medicaid roll-out across states as Instrumental Variables and Mundlak's device to control for endogeneity, we find that adult children's poor health has a significant effect on their older parents' health. Evidence suggests differing outcomes for mothers and fathers in terms of their mental and physical health. Mothers are more likely to develop mental illnesses and chronic conditions. We do not find any evidence suggesting that having unhealthy adult children affects fathers' mental health. However, unhealthy children appear to have a substantial effect on fathers' physical health, particularly on cancer and diabetes.