Introduction
Economic preparation for later life is a growing social concern in South Korea (hereafter ‘Korea’). Korea is rapidly an aged society (Chung and Park Reference Chung and Park2008) and population ageing can affect national economies as well as public security, such as public pensions and long-term care systems (Muramatsu and Akiyama Reference Muramatsu and Akiyama2011). A lack of economic preparation for later life in Korea has been identified in several surveys. According to a survey of Korean adults aged 45–64 in 2009, 32.4 per cent of respondents answered that they were not economically preparing for later life (S. J. Lee Reference Lee2009). In addition, most of the aged population in Korea has reported that they do not have sufficient pension benefits to support them in later life, or significant individual assets except for home ownership (Kim and Cook Reference Kim and Cook2011; Park et al. Reference Park, Phua, McNally and Sun2005). Kim and Cook (Reference Kim and Cook2011) emphasise that the national pension policy in Korea only started in 1988, so many older persons have not accrued sufficient pension funds. In 2014, the average pension payment per person is about 334,000 KRW (Korean Won, approximately US $300 per month) (Korean National Pension Service 2015), and this amount can be small, considering that the minimum living cost of a person in 2014 is about 603,000 KRW per month (Korean Ministry of Health and Welfare 2013). Overall, previous research has found a significant relationship between economic preparation for later life and wellbeing in later life (Lee and Law Reference Lee and Law2004; Noone, Stephens and Alpass Reference Noone, Stephens and Alpass2009), highlighting the importance of a more comprehensive understanding of the factors that may influence economic preparation in later life.
Intergenerational exchange patterns suggest that providing care to a grandchild may be related to economic preparation for later life among grandparents. Intergenerational social exchange patterns can be understood through social exchange theory. According to social exchange theory, exchanges between persons are social behaviours that may result in both economic and social outcomes (Lambe, Wittmann and Spekman Reference Lambe, Wittmann and Spekman2001). Some sociologists have applied this rationale to resource transfers between parents and their children and have studied providing child care in the context of intergenerational exchange patterns, particularly short-term and long-term exchange patterns (Frankenberg, Lillard and Willis Reference Frankenberg, Lillard and Willis2002; Henretta et al. Reference Henretta, Hill, Li, Soldo and Wolf1997; Silverstein Reference Silverstein, Bengtson, Acock, Allen, Dilworth-Anderson and Klein2005). An example of a short-term exchange is when older parents receive money from their adult children in exchange for providing care for grandchildren (Frankenberg, Lillard and Willis Reference Frankenberg, Lillard and Willis2002). Receiving a payment for providing child care could facilitate economic preparation for later life as it provides additional financial resources for the care-giver. Alternatively, providing care to grandchildren may decrease economic preparation for later life based on expectations of long-term exchange patterns. Empirical research has shown that parents who spend their time assisting their children are more likely to receive help from them in later life (Henretta et al. Reference Henretta, Hill, Li, Soldo and Wolf1997; Silverstein Reference Silverstein, Bengtson, Acock, Allen, Dilworth-Anderson and Klein2005). Grandparents who provide time transfers in the form of grandchild care to support their adult children may therefore expect future help (Lei Reference Lei2006). In other words, drawing on long-term intergenerational exchange patterns, grandparents providing grandchild care may be more likely to anticipate support in later life from their children, and as a result make fewer economic preparations to support themselves in later life. The need for investigating the linkage between short-term and long-term exchanges within the context of parent–child reciprocity has been emphasised by previous research (e.g. Leopold and Raab Reference Leopold and Raab2013; Molm and Cook Reference Molm, Cook, Cook, Fine and House1995).
Traditionally, Korean grandparents have provided child-care assistance for adult children (Lee and Bauer Reference Lee and Bauer2010, Reference Lee and Bauer2013). Since 1980, Korean females have increasingly participated in the paid labour force, facilitating the need for extensive amounts of grandchild care provided by grandparents, primarily grandmothers (Lee and Bauer Reference Lee and Bauer2013). Family care is preferred by parents in Korea, when children are young, especially for infant care (Chin et al. Reference Chin, Lee, Lee, Son and Sung2012). According to the Korean National Child Care Survey in 2012, about 35 per cent of parents who have children six years old or younger received child care help from their older parents (Korean Institute of Child Care and Education 2012), while about 13 per cent of grandparents who have grandchildren ten years old or younger provided child care for their adult children in 2006 (Lee and Bauer Reference Lee and Bauer2010). In addition, Lee and Bauer (Reference Lee and Bauer2010) found that Korean grandparents providing care for their grandchildren devote an average of 51.68 hours per week to the care of their grandchildren. Even though many grandparents take on substantial care-giving roles, few studies have evaluated the impact of providing care to grandchildren on economic behaviour such as economic preparation for later life or examined the Korean context.
Given the growing need for economic preparation for later life in Korea and the large number of grandmothers providing care for their grandchildren, the purpose of this study is to examine the relationship between providing grandchild care and economic preparations for later life among Korean grandmothers. Specifically, we investigate the relationship between the amount of care provided and economic preparation for later life, as well as the role of financial compensation for providing child care.
The link between providing grandchild care and economic preparation for later life
Economic preparation for later life
Previous literature concerning preparation for later life has delineated preparation domains including economic, physical and social preparation, and most studies have focused primarily on economic preparation as an essential area to be ready for in later life (Chansarn Reference Chansarn2013; Hurd and Rohwedder Reference Hurd, Rohwedder and David2011; Lee and Law Reference Lee and Law2004; Morgan and Eckert Reference Morgan and Eckert2004; Noone, Stephens and Alpass Reference Noone, Stephens and Alpass2009; Payne, Yorgason and Dew Reference Payne, Yorgason and Dew2014). In Korea, economic preparation for later life is considered a response to the increased need for long-term care and adult children's changing attitudes towards providing care for older parents. Traditionally, Korean grandparents have received financial and physical help from their co-resident adult children and grandchildren who live together due to the societal norm of filial piety (Park et al. Reference Park, Phua, McNally and Sun2005). Recent studies have suggested that Korean adult children have changed their attitudes on care for their parents, and rates of co-residence with older parents have rapidly decreased among Asian countries (Kim and Cook Reference Kim and Cook2011; Yasuda et al. Reference Yasuda, Iwai, Yi and Xie2011). Therefore, current and future Korean older adults may experience lower levels of these supports and be more vulnerable if they have not adequately prepared economically for later life.
Research on economic preparation for later life has found a number of significant predictors, including age, income, academic background and gender. Age and income are positively related to retirement preparation activity (Morgan and Eckert Reference Morgan and Eckert2004; Stawski, Hershey and Jacobs-Lawson Reference Stawski, Hershey and Jacobs-Lawson2007). Individuals with higher levels of education are more likely to have engaged in financial preparation for retirement (DeVaney and Chiremba Reference DeVaney and Chiremba2005). Interestingly, gender shows inconclusive results. For example, the study of Morgan and Eckert (Reference Morgan and Eckert2004) indicated gender is not a significant factor related to financial preparation while Chansarn (Reference Chansarn2013) reported that women are less prepared economically than men. Also several scholars suggest that gender can be an important factor in preparing for later life because women tend to have fewer financial resources (Taylor and Geldhauser Reference Taylor, Geldhauser, Shultz and Adams2007) and because gender is related to other variables (i.e. risk tolerance) that are associated with financial preparation (Yao, Gutter and Hanna Reference Yao, Gutter and Hanna2005).
Likewise, the literature examining the factors related to economic preparation for later life in Korea indicate demographic characteristics such as age, gender, education level, income and status of employment are significantly associated with economic preparation for later life (Cho, Song and Lee Reference Cho, Song and Lee2009; Kim Reference Kim2012; J. H. Lee Reference Lee2009; Park Reference Park2008). Kim (Reference Kim2012), using the Korean Retirement and Income Study (KReIS) to examine physical, economic and psychological preparation, found that respondents who were younger, had a higher education level and had higher income made more economic preparations for later life. Jeon and Bae (Reference Jeon and Bae2010), conducting comparison analysis between different socio-demographic groups, showed that respondents who were 40 years old or more, had a spouse, had higher income and had better health status reported significantly higher levels of economic preparation for later life. However, studies regarding gender in Korea also show inconsistent results. For example, J. H. Lee (Reference Lee2009) found no difference in the economic preparation levels between males and females between their forties and fifties, while Park (Reference Park2008) showed lower economic preparation among female respondents aged 45–59 years old compared to male respondents aged 45–59 years old. These inconsistent results could be related to differences in study design or the characteristics of included respondents (e.g. gender and age). While J. H. Lee (Reference Lee2009) used purposive sampling, Park (Reference Park2008) used representative data from the Korean National Statistical Office. In addition, in J. H. Lee's (Reference Lee2009) sample, more than 90 per cent of respondents were married and more than 60 per cent were female. The economic preparation of married females is influenced by the economic preparation of their husbands, which could lead to a finding of no gender differences in financial preparation. Using Andersen's (Reference Andersen1995) behaviour model, proposing that predisposing characteristics such as age and gender can affect preparation for later life, Park (Reference Park2008) suggests males' higher participation rate in the labour force may influence the behaviour of preparing for later life. In Korea, men are more likely to be employed than women, while women are more likely to undertake household work (Cho and Bae Reference Cho and Bae2004; Lee and Bauer Reference Lee and Bauer2013). Therefore, gender-based employment differences may be related to differences between males and females in economic preparation for later life (Park Reference Park2008). J. H. Lee (Reference Lee2009) suggested that future research needs to include diverse sample characteristics, such as broader age ranges than the range in her study, to identify differences between males and females in economic preparation for later life.
Care-giving and economic preparation for later life – social exchange theory
There are a number of reasons to expect a relationship between providing care for grandchildren and economic preparation for later life, including our understanding of intergenerational exchange patterns based on social exchange theory. Social exchange theorists hold that individuals act with rational choices about rewards and costs that produce the greatest benefit/satisfaction for them (Scott Reference Scott, Browning, Halcli and Webster2000). Some social exchange theorists have used this idea to examine intergenerational transfers in a family structure, particularly between parents and their children (Grundy Reference Grundy2005; Leopold and Raab Reference Leopold and Raab2013; Verbrugge and Chan Reference Verbrugge and Chan2008). Types of transfers between parents and adult children include material supports such as money, practical assistance such as daily personal care and emotional supports (Swartz Reference Swartz2009). Social exchange theory suggests that parents are more likely to assist children from whom they expect to receive help (Grundy Reference Grundy2005). As empirical support for this hypothesis, Leopold and Raab (Reference Leopold and Raab2013) found that in the United States adult children receiving financial aid from their parents provided more support to their parents in the parents' later life. Also, in Asian societies having a strong norm of family reciprocity, older people who provided practical help such as household chores for family members received more financial help from their family (Verbrugge and Chan Reference Verbrugge and Chan2008).
Recently, there has been increasing research studying intergenerational exchange in the context of time transfer as it concerns grandchild care. Studies focusing on grandchild care suggest that there are short-term and long-term exchange patterns between parents and their children (Frankenberg, Lillard and Willis Reference Frankenberg, Lillard and Willis2002; Henretta et al. Reference Henretta, Hill, Li, Soldo and Wolf1997; Lee and Bauer Reference Lee and Bauer2010; Silverstein Reference Silverstein, Bengtson, Acock, Allen, Dilworth-Anderson and Klein2005). Studies examining short-term exchange patterns have suggested the common type of compensation for providing child care is receiving cash (Frankenberg, Lillard and Willis Reference Frankenberg, Lillard and Willis2002; Lee and Bauer Reference Lee and Bauer2010). Frankenberg, Lillard and Willis (Reference Frankenberg, Lillard and Willis2002) noted that older parents may take money from their adult children as compensation for providing grandchild care for the adult children. Also, Cong and Silverstein (Reference Cong and Silverstein2011), using an exchange theory, reported that adult children in China provided financial rewards to their parents in exchange for grandchild care which may imply short-term exchange patterns. These short-term exchanges could mitigate any potential negative impact of providing grandchild care on economic preparation for later life or increase opportunities for economic preparation for later life by increasing the financial resources available to the care-giver which could allow for saving or investment.
Long-term exchange patterns between parents and their children have also been suggested to explain the relationship between providing support and receiving repayments in time transfers among family members (Lee and Bauer Reference Lee and Bauer2010; Leopold and Raab Reference Leopold and Raab2013; Silverstein Reference Silverstein, Bengtson, Acock, Allen, Dilworth-Anderson and Klein2005). Consistent with long-term exchange patterns, parents who provided grandchild care to their children were more likely to receive support in later life from their adult children (Henretta et al. Reference Henretta, Hill, Li, Soldo and Wolf1997; Silverstein Reference Silverstein, Bengtson, Acock, Allen, Dilworth-Anderson and Klein2005). These transfers among family members can act as ‘insurance against risk’ in later life (Frankenberg, Lillard and Willis Reference Frankenberg, Lillard and Willis2002).
Focusing on the Confucian culture that emphasises filial piety between older adults, adult children and grandchildren, several empirical studies reflect long-term exchange patterns where Korean grandparents provide care for their grandchildren. Traditionally, Korean adult children expect that they need to support older adults by living together with them (Silverstein, Cong and Li Reference Silverstein, Cong and Li2006). In turn, Korean grandparents often spend their time caring for their grandchildren in their co-residence with their children. In terms of the exchange patterns of grandparents in Korea, Lee and Bauer (Reference Lee and Bauer2010) found a negative relationship between Korean grandmothers' perception of their future economic situation and providing care for grandchildren. In terms of exchange patterns of grandparents in Korea, Lee and Bauer (Reference Lee and Bauer2010) found a negative relationship between Korean grandmothers' perception of their future economic situation and providing grandchild care. In addition, a study examining the relationship between Korean grandparents' providing grandchild care and their perception of support at old age found that grandparents providing grandchild care prefer to live with their adult children in the future more than grandparents who did not provide grandchild care (Ha and Hong Reference Ha and Hong2014). Given that co-resident generations can provide important sources of daily assistance, economic and practical help (Swartz Reference Swartz2009), the findings of Ha and Hong (Reference Ha and Hong2014) are consistent with a long-term exchange perspective.
To understand the structure of intergenerational exchanges in families, there is an additional attempt to consider short-term and long-term exchanges simultaneously. Leopold and Raab (Reference Leopold and Raab2013) report that previous literature has investigated the two patterns separately, and emphasise the need to investigate how short-term and long-term exchanges influence each other in order to understand better how mutual assistance among families operates over the lifecourse. Also, Molm and Cook (Reference Molm, Cook, Cook, Fine and House1995) argue that later exchanges in the parent and adult child relationship are influenced by earlier exchanges. However, it is unclear if short-term exchanges negate any potential expectations for long-term exchange in the context of providing grandchild care among grandparents in Korea.
Grandchild care and economic impacts on grandparents in Korea
Researchers have often suggested three styles of providing care for grandchildren (Fuller-Thomson, Serbinski and McCormack Reference Fuller-Thomson, Serbinski and McCormack2014; Jendrek Reference Jendrek1994): custodial care, co-residential care and non-co-residential care. This study refers to providing care for grandchildren as spending time caring for grandchildren based on Baker and Silverstein's (Reference Baker, Silverstein, Arber and Timonen2012) definition. Describing that grandparents provide diverse care methods for grandchildren according to the circumstances that grandparents face, Baker and Silverstein (Reference Baker, Silverstein, Arber and Timonen2012) define grandparents providing care for grandchildren as grandparents spending a great amount of time taking care of grandchildren.
In Korea, as labour market participation by females with young children has increased, many grandparents are facing requests to provide child care for their grandchildren (Ko and Hank Reference Ko and Hank2013; Lee and Bauer Reference Lee and Bauer2010). For example, using the Korean Longitudinal Study of Ageing (KLoSA), Lee and Bauer (Reference Lee and Bauer2010) found that 12.6 per cent of the grandmothers provided care for their grandchildren younger than ten years old in the previous 12 months. They further found that grandmothers who have a working daughter were more likely to provide grandchild care, which suggests the positive associations between female employment and grandchild care by grandparents.
Our understanding of the economic impacts of providing child care on grandparents in Korea is limited. Using the KReIS, Kim and Yu (Reference Kim and Yu2012) examined how providing care for grandchildren affected changes in income among older adults. Using longitudinal data, they found that providing care for grandchildren was negatively related to the initial income status of older adults while the rate of change in income status was not significant. The results of this study may imply that while providing care does not negatively impact income, grandparents providing grandchild care may have fewer economic resources than grandparents who do not provide grandchild care, and they may have more intentions to expect support from their adult children receiving their child care assistance.
In addition, in understanding the economic impact of providing grandchild care, the gendered nature of providing care needs to be considered. Most grandchild care is provided by women (Baker, Silverstein and Putney Reference Baker, Silverstein and Putney2008) and care-giving roles in general have been associated with negative economic outcomes in later life (Wakabayashi and Donato Reference Wakabayashi and Donato2006). In Korea, grandmothers also are more likely than grandfathers to provide care to grandchildren (Ko and Hank Reference Ko and Hank2013; Lee and Bauer Reference Lee and Bauer2010), which is consistent with findings from other countries (Hank and Buber Reference Hank and Buber2009; Minkler and Fuller-Thomson Reference Minkler and Fuller-Thomson2005). Korea has considered taking care of children as the female's role due to the Confucian culture (Jun Reference Jun2015; Maehara and Takemura Reference Maehara and Takemura2007). In Confucian culture, women have the main responsibility for caring for their children and grandmothers have been a main resource in child care (J. Lee Reference Lee2009). According to J. Lee (Reference Lee2009), grandmothers who live with mothers having young children in the same households often assist the mothers in taking care of the grandchildren.
Thus, based on the empirical as well as theoretical literature, we can expect that providing care for grandchildren is related to grandparents’ economic behaviours such as economic preparation for later life. Furthermore, in exploring the relationship among Korean grandmothers, the magnitude of care provided for grandchildren needs to be considered. Previous literature in other countries has mentioned the consideration of care-giving intensity (Ho Reference Ho2013; Vandell et al. Reference Vandell, McCartney, Owen, Booth and Clarke-Stewart2003) and found higher levels of care are associated with more profound consequences (Chen and Liu Reference Chen and Liu2012), while Korean literature has only considered whether or not grandparents provide care for grandchildren (Kim and Yu Reference Kim and Yu2012; Lee and Bauer Reference Lee and Bauer2010).
Research questions and contributions
Based on review of the intergenerational exchange models and empirical studies on economic preparation for later life and providing grandchild care among Koreans, this paper investigates the relationship between providing grandchild care and grandmothers’ economic preparations for later life in Korea by addressing three research questions. First, what is the relationship between the amount of grandchild care provided by grandmothers and their economic preparations for later life, controlling for socio-demographic factors? Considering that planning for the future depends on present expectations about the future (Anderson, Burkhauser and Quinn Reference Anderson, Burkhauser and Quinn1986), an individual expecting that she (i.e. grandparents providing grandchild care) will receive assistance in later life (as a long-term exchange pattern) could have a decreased intention to prepare for later life, with higher levels of care being associated with higher expectations of receiving assistance in later life. While we do not directly measure this expectation for long-term exchange, we hypothesise that higher levels of care provided by grandmothers will be associated with lower levels of economic preparation. Second, is receiving monetary compensation for grandchild care (as a form of short-term exchange) related to economic preparation for later life? Third, does monetary compensation influence the relationship between hours of care provided and economic preparation for later life?
By answering these three research questions, the present study contributes to the literature by identifying a new predictable factor related to economic preparation for later life. Also, this paper makes a contribution in providing information about the linkage between short-term and long-term exchange patterns in intergenerational exchange theory.
Method
Data and sample
This study used longitudinal data from the main survey (2009) and the supplementary survey (2010) of the KReIS. The first wave of KReIS was conducted in 2005 and the total sample of the first wave was 8,689 respondents. The sample of KReIS consists of 5,110 households that include persons aged 50 years or older and the individuals’ spouses regardless of spouses’ age. The KReIS main survey asks questions concerning demographic characteristics, household income and status of providing care for grandchildren, etc. The KReIS supplementary survey in 2010 included questions about individuals' preparation behaviour for old age.
The sample for this study came from a sub-sample of 2,599 women from the KReIS. The sample was made up of grandmothers who had at least one grandchild under the age of ten in 2009 and responded to the 2010 supplementary survey on economic preparations for later life. A subset of analyses was done on care-giving grandmothers (N = 279) who provided at least one hour per week of care to a grandchild in 2009. KReIS defined grandparental child care as caring for grandchildren younger than ten years old regardless of co-residence with grandchildren. This definition excludes grandparents who often spend their time playing with grandchildren.
Included variables
Independent variables
The main independent variables in this study were the provision of grandchild care and financial compensation for grandchild care, both measured in 2009. The provision of grandchild care was measured by one item: amount of hours grandmothers provide care to grandchildren per week. The KReIS asks the amount of care provided for each grandchild separately when they were caring for more than one grandchild. In the case of those grandparents, we selected the greatest amount of grandchild care per week among all grandchildren cared for. We conservatively assumed that the hours providing care to different grandchildren were likely to overlap and that summing the hours of care provided across grandchildren would overestimate the number of hours of care provided. Among the 279 grandmothers providing grandchild care, 78 (about 30%) provided care for two grandchildren and six (about 2%) provided care for three grandchildren.
In addition, to investigate whether receiving monetary compensation for providing grandchild care is related to economic preparation for later life, this paper used one item to gather information about receiving financial compensation for providing grandchild care. This variable is a categorical variable coded as ‘0 = do not receive’ and ‘1 = receive’.
Dependent variable
Data on the dependent variable, economic preparation for later life, were collected in 2010. Economic preparation for later life was measured using a scale consisting of eight items. Each respondent in the supplemental survey was asked about economic preparation for each item using a five-point scale ranging from ‘1 = do not prepare’ to ‘5 = prepare very well’. The eight items were:
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1. I collect information to have financial affordability in later life.
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2. I calculate current gross assets of my household for later life.
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3. I economise my living expense for later life.
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4. I regularly save up my money for later life.
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5. I have the intention of investing my money in real estates and financial products.
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6. I have the intention of investing my money to establish my own business.
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7. I have the intention of using reverse mortgage for living expense in later life.
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8. If I have a chance to work for pay, I have the intention of working for later life.
Having a higher score correlates to respondents having a higher level of economic preparation, and total scores ranged from eight to 40. Cronbach's alpha was estimated to ensure internal consistency of the data on economic preparation for later life used in this study. The Cronbach's alpha coefficient for the eight items was 0.85 so the scale was judged to be acceptable and reliable. In empirical studies, a Cronbach's alpha coefficient above 0.70 is acceptable (Peterson Reference Peterson1994). Other studies using this scale have also demonstrated Cronbach's alpha coefficients above 0.80 (Kim Reference Kim2012; Korean National Pension Research Institution 2008).
Control variables
All control variables were measured in 2009. Based on previous studies showing that demographic variables are related to economic preparation for later life (Cho, Song and Lee Reference Cho, Song and Lee2009; Kim Reference Kim2012; Lee Reference Lee2009; Morgan and Eckert Reference Morgan and Eckert2004; Park Reference Park2008; Stawski, Hershey and Jacobs-Lawson Reference Stawski, Hershey and Jacobs-Lawson2007), this study selected age, marital status, education level and household income as control variables. Age was measured as a continuous variable. Marital status was a categorical variable and included ‘0 = don't have a spouse’ and ‘1 = have a spouse’. Education level was a categorical variable with five categories: uneducated, graduation from elementary school, graduation from middle school, graduation from high school and graduation from college or above. The reference group was the respondents who are uneducated. Household income was a continuous variable indicating the average annual household income in hundreds of thousands of KRW.
Procedure
Stata SE/12 was used to conduct all analyses. Descriptive statistics and multiple regression analyses were used to understand the relationship between providing care for grandchildren and economic preparation for later life among Korean grandmothers. For the multivariate regressions, multiple imputation was used to retain all cases that had a valid response for the independent and dependent variables. Missing values were imputed for 12.8 per cent of the sample on income. No other variables had missing values. With multiple imputation, multiple separate data-sets are imputed, allowing missing values to take on a different solution for each imputation (Acock Reference Acock2005). The analyses are then run on each data-set and the parameter estimates pooled to provide a single solution. This solution incorporates the variability of the different imputations, producing unbiased standard errors (Acock Reference Acock2005). The median is a suitable way to obtain the pooled R 2 of imputed data-sets (Marshall et al. Reference Marshall, Altman, Holder and Royston2009). To adjust for the over-sampling of those aged 50 or more in KReIS, this study applied a weighting procedure in the regression analysis.
Multiple regression analyses were divided into six models for testing our research questions. The dependent variable for all models was economic preparation for later life and all models controlled for age, education, marital status and household income. Models 1–3 included the entire sample of grandmothers and separately analysed the relationship between three different grandparent care-giving variables and economic preparation for later life, net of control variables. Model 1 included a dichotomous indicator of whether or not the grandmother provided on average at least one hour of care per week. Model 2 examined the impact of the average hours of care to grandchildren per week. Model 3 investigated the impact of monetary compensation for care-giving. To gain a deeper understanding of the association between the average amount of grandchild care per week, monetary compensation for care and economic preparation for later life among care-givers, three additional analyses (Models 4–6) were conducted on a sub-sample that included only care-givers. Model 4 examined the impact of the average hours of care to grandchildren per week on economic preparation for later life among care-givers. Model 5 included both the average amount of grandchild care per week and a dichotomous indicator of monetary compensation for care. Model 6 included both of these variables again, as well as a variable capturing the interaction between average hours of care per week and monetary compensation.
We examined the issue of multicollinearity in these models. However, there were no variables that should be excluded in the regression models due to the multicollinearity. Generally, tolerances in the range of 0.40 are worthy of concern (Allison Reference Allison1999) and a variance inflation factor (VIF) value of 10 is associated with a tolerance of 0.1, which is considered problematic by Cohen et al. (Reference Cohen, Cohen, West and Aiken2013) . Based on the value of VIF of included variables in these models there are no variables with values above 10 in VIF or below 0.4 in tolerance.
Results
Descriptive analysis
Table 1 presents the sample characteristics. Approximately 10.7 per cent of grandmothers with grandchildren under the age of ten report providing an average of at least one hour of grandchild care per week. Respondents' mean age is 67.2 years, with care-giving grandmothers being slightly younger on average (63.4) than non-care-giving grandmothers (67.7). Regarding education level, 32.1 per cent of the respondents were not educated, 40.3 per cent completed elementary school, 15.4 per cent completed middle school, 10.1 per cent completed high school and 2.2 per cent completed college or above. Non-care-giving grandmothers were more likely to be uneducated than care-giving grandmothers, whereas care-giving grandmothers were more likely to have completed middle school than non-care-giving grandmothers. A majority of respondents were married (63.4 per cent), with care-giving grandmothers being slightly more likely than non-care-giving grandmothers to be married. Respondents' average annual household income was approximately 22,842,000 KRW (approximately US $20,846). The mean score of economic preparation for later life is 17.3, with care-givers scoring slightly higher than non-care-givers.
Descriptive statistics of grandparents providing grandchild care
Note: SD: standard deviation.
Source: Data are from the Korean Retirement and Income Study 2009 (Wave 3) and 2010 (Wave 3 Supplement).
Only 36.6 per cent of care-giving grandmothers received financial compensation for grandchild care. For care-givers, the mean hours of providing grandchild care is 28.2 hours per week. When grandparents were divided at a point of 40 hours, which is considered full-time work in Korea, about 20 per cent of respondents can be categorised as providing full-time care. The mean hours of providing grandchild care (28.2 hours per week) in this study is smaller than the average hours (51.68 hours per week) reported in a previous study by Lee and Bauer (Reference Lee and Bauer2010). This difference may be related to the different sampling between the KReIS and the KLoSA. The KLoSA that Lee and Bauer used is a survey of respondents aged 45 years or older while KReIS includes adults aged 50 years or older and their spouses. Since younger grandmothers are more likely to provide longer hours of grandchild care (Lee and Bauer), the age composition of the different samples could explain why the average hours of care per week is lower in this study.
Multiple regression results
Table 2 presents the results of the multiple regression models for Models 1–3 which included the entire sample of grandmothers. In Model 1, the overall multiple regression was statistically significant (R 2 = 0.243, p < 0.001). Age, education and marital status all significantly predicted economic preparation for later life, while household income did not. Older age, being uneducated and not having a spouse were all negatively associated with economic preparation for later life. The dichotomous indicator of providing grandchild care did not reach statistical significance (p = 0.12). In Model 2, the overall multiple regression was statistically significant (R 2 = 0.245, p < 0.001). Controlling for socio-demographic characteristics, the average amount of grandchild care provided per week was significantly and negatively associated with economic preparation for later life (b = −0.018, p < 0.01). Model 3 looked at the relationship between receiving financial compensation for grandchild care and economic preparation for later life across all grandmothers and did not find a significant relationship.
Results of multiple regressions of indicators of grandchild care on economic preparation for later life of grandmothers
Notes: N = 2,599. b: unstandardised regression coefficient. SE: standard error. Ref.: reference category.
Significance levels: * p < 0.05, ** p < 0.01, *** p < 0.001.
To examine the relationships between average hours of care per week, receiving financial compensation for providing grandchild care and economic preparation for later life in more detail, we conducted additional analyses with just the care-giving grandmothers. Model 4 has the same variables as Model 2 (Table 3). When considering these variables among just care-giving grandmothers, the overall model is still significant (p < 0.001), but only 18.1 per cent of the variation in economic preparation for later life can be explained by this model for this sub-group. Age (p < 0.001) and average amount of grandchild care (p < 0.05) are both negatively related to economic preparation for later life, but education, marital status and income did not achieve statistical significance. In Model 5, we added receiving financial compensation for providing grandchild care along with the previous variables in Model 4. The overall multiple regression in Model 5 was significant but there was no meaningful change in the model accountability compared to Model 4 (R 2 = 0.181, p < 0.001). Receiving financial compensation for providing grandchild care did not significantly affect economic preparation for later life (b = −0.141, p = 0.815), and did not mediate the influence of the amount of grandchild care provided per week (b = −0.027, p < 0.05). In Model 6 we included interaction terms between average hours of care per week and receiving financial compensation for grandchild care. There was no significant interaction effect between those two variables (p = 0.547).
Results of multiple regressions of indicators of grandchild care on economic preparation for later life of grandmother care-givers
Notes: N = 2799. b: unstandardised regression coefficient. SE: standard error. Ref.: reference category.
Significance levels: * p < 0.05, *** p < 0.001.
Additional analyses (not shown) also considered a continuous indicator of financial compensation for grandchild care but it was not statistically significant. Exploratory analyses (not shown) surrounding a possible non-linear relationship between the amount of financial compensation received and economic preparation for later life suggests a possible complex relationship where those who receive a small amount of financial compensation are less prepared economically for later life than those who do not receive any compensation, and those who receive higher levels of compensation.
Discussion
This paper investigated the relationship between providing grandchild care and economic preparation for later life among Korean grandmothers. In addition, this paper considered the relationship between receiving monetary compensation for providing grandchild and economic preparation for later life, and explored the potential impact of receiving monetary compensation on the relationship between amount of care provided and economic preparation for later life. This section discusses the main findings, implications for future research and social policies, and limitations.
Findings and implications
There are key three findings based on our research. First, a simple consideration of whether or not a grandmother provides grandchild care does not fully capture the potential impact of this care on economic preparation for later life. The intensity of care provided matters, with higher-intensity care having a larger negative relationship with economic preparation for later life than lower-intensity care among Korean grandmothers.
A negative relationship between average hours of care provided per week and economic preparation for later life is consistent with a long-term model of intergenerational exchange. Guzman (Reference Guzman2003) reported higher anticipation of future support from adult children among grandparents providing care for grandchildren. Adopting the finding of Guzman, a possible explanation of our finding is that increasing levels of grandchild care can be associated with greater expectations of support in later life from adult children (as a long-term exchange). If grandmothers have greater expectations of support in later life they may be less likely to make personal economic preparations for later life, because current expectations can influence plans for the future (Anderson, Burkhauser and Quinn Reference Anderson, Burkhauser and Quinn1986). Although we did not directly examine long-term exchange patterns among grandparents, or expectations of future support, the negative relationship between providing grandchild care and economic preparation is consistent with long-term exchange patterns and can imply a linkage between providing grandchild care and grandparents' economic preparation for later life. An alternative explanation of our finding is that the more care provided by grandparents, the more economic consequences they may experience as a result of care-giving, and these economic consequences may inhibit economic preparation for later life.
Qualitative studies on experiences of grandparents providing care for grandchildren imply economic burdens among those grandparents (Kim and Yu Reference Kim and Yu2012; Oh Reference Oh2010; Seo Reference Seo2009). For example, by interviewing grandparents raising grandchildren without adult children, Oh (Reference Oh2010) indicated that the major concern of those grandparents is economic burdens. Therefore, providing grandchild care may reduce the ability of older adults to prepare economically for later life, putting them in a more vulnerable position than grandparents who do not provide care. In additional analyses (not shown), we found that the economic preparation indicator that was most sensitive to the amount of grandchild care provided was ‘I regularly save up money for later life’, even after controlling for income and other socio-demographic variables. The extra expenses associated with providing grandchild care could make it more difficult to put money away for later life, although financial compensation for providing care (which would offset any economic burdens) was not related to economic preparation for later life in this study.
Second, our finding did not find a significant relationship between receiving financial compensation for grandchild care and grandparents' economic preparation for later life. However, additional analyses (not shown) suggest a possible non-linear relationship where those who are receiving a small amount of compensation are less prepared economically for later life than those who receive no compensation or larger amounts of compensation. It could be that grandmothers who receive a small amount of compensation are more economically disadvantaged than those who receive no compensation and those whose families have the resources to provide large amounts of financial compensation. Future research should explore this relationship in more detail.
Finally, our results suggest financial compensation does not mediate or moderate the negative relationship between average hours of care per week and economic preparation for later life. In other words, short-term exchanges in the form of financial compensation for grandchild care did not negate any of the negative impact of amount of care provided on economic preparation. If the negative relationship between average hours of care provided and economic preparation for later life is related to long-term exchange patterns and higher expectations of support in both directions (to the children now in terms of grandchild care and from the children later in terms of support in old age), then these findings imply that there is no linkage between short-term and long-term exchange patterns with regards to intergenerational exchanges within families. Leopold and Raab (Reference Leopold and Raab2013) also failed to find a significant linkage between short-term and longer-term reciprocity, using reciprocity between parents and adult children. Although it is difficult to think that an immediate exchange is not connected with grandmothers' intentions to prepare economically for later life and expectations for long-term exchanges, it is possible that the immediate monetary compensation for grandchild care is related more to the current needs and resources of both generations than it is to consciously balancing exchanges in the short term to reduce the obligation for future (long-term) exchanges.
Suggestions for future research and policies
Research suggestions
There are several suggestions for future research related to our main findings. First, we suggested two possible explanations about a negative relationship between providing grandchild care and grandparents' economic preparation for later life. While the expectation for future support from children is one explanation, it is also possible that grandchild care can decrease older adults' ability to prepare economically for later life. Unfortunately, our data-set does not have the information necessary to tease out the exact mechanisms underlying the negative impact of grandchild care on economic preparation for later life. Future research in this area should specifically measure expectations for support from adult children in later life and the economic burden of providing grandchild care to test these competing explanations.
Second, we did not find a significant association between short-term exchange patterns and long-term exchange patterns among grandparents providing grandchild care. However, considering the lack of studies examining the relationship between these two patterns, future research about this topic is needed to gain more specific knowledge about the association between short-term and long-term exchange patterns within families. The fact that Korean grandparents caring for grandchildren were more likely to spend their money to pay into private pension plans for grandchildren or to buy materials for them (Hong and Choi Reference Hong and Choi2012) may offset any potential gain from monetary compensation. Qualitative data collection may provide a more nuanced understanding of the ebb and flow of resources between generations, including the interplay of short-term and long-term exchanges and expectations for support.
Policy suggestions
Economic preparation for later life in Korea is of great public interest because Korea is one of the Organisation for Economic Co-operation and Development countries that is rapidly ageing. A growing social concern for economic support for Korean older adults is being fuelled by the weak financial wellbeing of older adults in later life (Kim and Cook Reference Kim and Cook2011). Our findings show that Korean policy makers need to consider how providing grandchild care impacts older adults' economic preparation for later life. In a society having weak public social security, such as Korea, older individuals may evaluate providing grandchild care as one of the ways to prepare for later life if they expect their adult children to reciprocate in later life (Ha and Hong Reference Ha and Hong2014). However, changing attitudes and availability of children to provide this needed support may leave many older adults without the support from adult children they were expecting, increasing their vulnerability.
To facilitate financial preparation for later life among grandparents providing grandchild care, policy makers need to consider additional ways to provide support to care-givers. For example, the United Kingdom introduced national insurance credits for grandparents providing grandchild care and designed these insurance credits to be accumulated towards a public pension (Glaser et al. Reference Glaser, Ribé Montserrat, Waginger, Price, Stuchbury and Tinker2010). Considering that grandparents providing grandchild care belong generally to middle and older age groups (Jun Reference Jun2015), and are predominantly female, care-giving credits for Korean grandparents providing care for grandchildren could add pension credits and later pension payments, which can help to bolster financial wellbeing in later life and reduce economic inequality between older men and women.
Limitations
Even though our study obtained significant findings, there are several limitations related to the data. First, since the KReIS is a nationally representative data-set of households that included individuals 50 years or older, our study did not include younger grandparents providing grandchild care. Although KReIS is a longitudinal data-set, information about economic preparation was only available from the supplement survey in 2010. Therefore, we were not able to look at how changes in grandparent care are related to changes in economic preparation in later life. Future studies need to collect multiple waves of data on key variables to examine the relationships between providing grandchild care and economic preparation more thoroughly. The measurement of the independent variable was less than ideal as a measure of the total hours of grandchild care provided on average per week was not asked. Our conservative assumption that care for multiple children always occurred at the same time likely underestimated the number of hours of care provided by some grandparents.
Conclusion
Given the growing emphasis on economic preparation for later life because of a large number of older people and the increased involvement of grandparents in providing grandchild care in Korea, identifying how providing grandchild care is associated with the grandparents' economic preparation for later life is a critical precursor to developing effective policies for Korean older adults. Changing attitudes about caring for grandparents combined with changes in the role young Korean women are playing in the economy may make it likely that grandparents' expectations of receiving help from their adult children will be different from the expectations and capacity of adult children to provide that help. Also, given the results of this study and other research showing negative economic outcomes of providing grandchild care (Kim and Yu Reference Kim and Yu2012; Oh Reference Oh2010; Seo Reference Seo2009), social policy makers need to take into account the impact of grandparents providing grandchild care on economic preparation for later life.
