Tim Miller > Curriculum Vitae > Abstract Page

by Andrew Mason and Timothy Miller

Intergenerational accounting methods are described that provide estimates of the income of the extended families of members of each age cohort. We apply the methods to Taiwan and examine the capacity of the extended family to smooth consumption over the life cycle by redistributing income among its members. The full sharing of resources by family members would purge most of the life-cycle variation in income. However, systematic variation in the age structure of extended families produces a Chayanov-type cycle of income that cannot be modulated by within-family transfers (Chayanov, 1966). As a consequence, either consumption must be characterized by a similar cycle or other non-familial reallocation mechanisms must be employed to smooth life-cyle income further.

Analysis of household income data available annually from Taiwan for 1976 to 1991 shows that until 1988 income was fully shared across generations through co-residence within extended families. Per capita household income was independent of age save for variation imparted by the Chayanov cycle. Since 1988, however, the per capita household income of the elderly has declined in relation to the per capita income of the extended families to which they belong. Declining co-residence of the elderly within extended families is responsible for the relative decline in their income. Although interhousehold family transfers have increased during the same period, they have only partitally offset the effect of the increase in independent living.

Chapter 3 in Sharing the wealth. Edited by Andrew Mason and George Tapinos. Oxford: Oxford University Press, 2000.

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