Bargaining Power and Intergenerational Coresidence: Adult children and their disabled elderly parents

Because of gradual deterioration with age or sudden health shocks, elderly persons face a
considerable probability of becoming disabled and unable to care for themselves. About 20% of
older U.S. adults have chronic disabilities (Manton and Gu 2001); roughly one-third have
mobility limitations and 7-8% have severe cognitive impairments (Freedman and Martin 1998;
Freedman et al. 2000). Recent evidence suggests a downward trend in the age-adjusted
prevalence of disability and functional limitations, raising hope that long term care burdens on
families and public programs will be less than feared. At the same time, growth in the elderly
population and evidence that the level of disability of those who are disabled has increased
(Spillman and Pezzin 2000), suggest that changes in the overall demand for long term care in the
future are, at best, ambiguous.