The paper argues that an elderly person’s coresidence with children is an important aspect of the intergenerational transfers, generally overlooked in the literature, involving both financial and non-financial exchanges of services between elderly parents and coresident adult children. This allows us to determine the effects of financial and other contributions of the elderly and adult children on coresidency arrangements in rural India, using recent NSS data. Given that the determination of a single coresidency equation in terms of the two-way contributions is likely to give rise to highly biased results, we estimate a correlated recursive system of equations, addressing the issue of simultaneity bias. These corrected estimates highlight the lack of caring for disadvantaged elderly persons, who are older, have the wrong gender (i.e. female), have no spouse and also who lack health, wealth or both in a society with virtual absence of extra-familial welfare institutions.