Economic development and family structure: From pater familias to the nuclear family

•We study the link between intergenerational coresidence and economic development.•We focus on the role of age-biased technical progress.•When technical progress is high, there is a shift from stagnation to growth.•There is a transition from coresidence to non-coresidence.•The social status of the elderly tends to deteriorate.

We provide a theory of the interaction between intergenerational living arrangements and economic development. We show that, when technical progress is fast enough, the economy experiences a shift from stagnation to growth, there is a transition from coresidence to non-coresidence, and the social status of the elderly tends to deteriorate.