On the Intersectionality of Private and Public Support during Unemployment

Alzbeta Bartova, Erasmus University Rotterdam
Pearl Dykstra, Erasmus University Rotterdam

The research on intergenerational downward transfers shows that children who experienced various positive, as well as negative, life transitions such as marriage, divorce, parenthood or unemployment are more likely to receive financial support from their parents. Nonetheless, most studies have adopted a static approach that only estimates the association between a certain status (e.g., unemployment, the presence of children in the household) and parental support. Majority of these studies also use macro-level social policy indicators that implicitly assume that state support is available to everyone who needs it. However, this is not always the case. Consequently, we have little understanding of the mechanisms behind the relationship between public and private support in intergenerational downward transfers. Our paper addresses these issues by focusing on transitions to unemployment and the interaction between material support from parents and the state unemployment benefits in Germany using the German Family Panel (pairfam). We constructed individual level indicators of eligibility to unemployment insurance benefits for each respondent and a variable that indicates the expiration period of these benefits. This enabled us to investigate whether the state support discourages parents from providing material support to their children. Our results suggest strong a ‘crowding in’ effect of the German unemployment insurance benefit on material support from parents. It shows that the help from parents does not necessarily come in times when it is most needed (i.e., when children are not entitled to the state support, when the state support expires).

Presented in Session 33: Intergenerational Relations and Transfer Channels