Can Children Serve As An Incomplete Insurance Good For Their Parents

In the literature, children play a role of incomplete insurance in markets lacking well functioning credit mechanisms. We test this conjecture using the Multi-Generational Panel Dataset of Liaoning (CMGPD-LN) which covers the feudal years of 1749 to 1909 during the Qing Dynasty. This data set comprises mostly farmers and therefore is free of complications such as social nets, pension plans, and government intervention that modern data entails. We use a unique identifying strategy in order to see how the number of children one has prolongs the lifespan of the parent: those who become widows.Since widowhood is an imposed condition which is not directly related to the prior health condition of the widow, we make the case that the ill effects of the health condition of the remaining partner must come after widowhood, albeit emotional distress, or loss of economic resources. We examine across cohorts of widows, whether the number of children one has prior to widowhood improves one survivability thereafter.The results show that individuals with children live longer than those without children. Those with daughters tend to live longer than those with sons. We control for all other kinship relationships such as other living relatives who might provide social capital but find that the impact of children on survivability is still large and significant.