This article is focused on children providing and financing long-term care for their elderly parent. The aim of this work is to highlight the interactions that may take place among siblings when deciding whether or not to become a caregiver. We look at families with two children using data from the Survey of Health, Ageing and Retirement in Europe; our sample contains 314 dependent elderly and their 628 adult children. In order to identify the interactions between siblings, we have specified a two-person discrete game model. To estimate this model, without invoking the 'coherency' condition, we have added an endogenous selection rule to solve the incompleteness problem arising from multiplicity or absence of equilibrium. Our empirical results suggest that the three classical effects identified by Manski could potentially explain the observed correlation between the siblings' caregiving behaviour. Correlated effects alone appear to be weak. Contextual interactions and endogenous interactions reveal cross-effects. The asymmetric character of the endogenous interactions is our most striking result. The younger child's involvement appears to increase the net benefit of caregiving for the elder one, whereas the elder child's involvement decreases the net benefit of caregiving for the younger child.
Copyright (c) 2009 John Wiley & Sons, Ltd.