We propose a causal test of the demonstration effect theory using gender differences in the provision of upstream transfers. Using Romanian data, we find that young daughters affect their parents' contact with the grandparents differently than young sons do.

This paper proposes to decompose non-linear models deduced from a latent regression framework using the latent dependent outcome as dependent variable and the Oaxaca–Blinder decomposition technique. Values of the unobserved latent outcome are obtained using simulated residuals.