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Objective. To examine the effect of changes in parent-child coresidence on caregiving decisions of non-resident siblings over a 5-year period while controlling for characteristics of the elderly parent and adult children in the family network. Method. We use difference-in-difference models applied to Health and Retirement Study-Assets and Health Dynamics of the Elderly data to test the hypothesis that the formation of a joint household between a parent and one of her children raises the bargaining power of non-resident siblings, who then reduce their care to the parent. Similarly, the dissolution of a parent-child household is expected to increase the bargaining power of the child who no longer coresides with the parent relative to her siblings. Results. We find that children whose parent and sibling begin coresiding during the study period are less likely to provide care and provide fewer hours of care than children whose parents never coresided with a child. Adult children whose parent cease coresiding with a sibling, on the other hand, have a higher likelihood of providing care and provide significantly more hours of care relative to children whose parents either coresided with a sibling in both time periods or never coresided with a child. Discussion. Meeting the needs of the growing elderly population while maintaining them in the community is a particular focus of long-term care policy. To the extent that shared living is an important component of such care, the observed sensitivity of nonresident children's caregiving efforts has implications for the well-being of both disabled parents and their coresiding adult children. [ABSTRACT FROM AUTHOR]

In this article, we use a two-stage bargaining model to analyze the living arrangement of a disabled elderly parent and the assistance provided to the parent by her adult children. The first stage determines the living arrangement: the parent can live in a nursing home, live alone in the community, or live with any child who has invited coresidence. The second stage determines the assistance provided by each child in the family. Working by backward induction, we first calculate the level of assistance that each child would provide to the parent in each possible living arrangement. Using these calculations, we then analyze the living arrangement that would emerge from the first stage game. A key assumption of our model is that family members cannot or will not make binding agreements at the first stage regarding transfers at the second stage. Because coresidence is likely to reduce the bargaining power of the coresident child relative to her siblings, coresidence may fail to emerge as the equilibrium living arrangement even when it is Pareto efficient. That is, the outcome of the two-stage game need not be Pareto efficient. [ABSTRACT FROM AUTHOR]