THE EFFECT OF CORESIDENCE WITH ADULT CHILDREN ON THE PSYCHOLOGICAL WELLBEING OF THE ELDERLY: EVIDENCE FROM URBAN CHINA.

Abstract

Due to the importance that traditional Chinese society places on the virtue of filial piety, coresidence with adult children is assumed to have a positive impact on the psychological wellbeing of the elderly in China. Based on data from the Chinese Family Panel Studies, this paper studies the causal impact of coresidence with adult children on the psychological wellbeing of the elderly in urban China. This study uses the instrumental variables method to address the problems of endogeneity and simultaneity, exploiting the gender of the eldest child (whether the eldest child is male) as the instrument. The two-stage-least-squares estimates indicate that the effect of coresidence with adult children on the psychological wellbeing of the elderly is statistically insignificant.