Parent-to-Adult Child Financial Transfers for School and Financial Outcomes
Receiving financial help from parents after reaching adulthood contradicts American individualism. Yet, a substantial proportion of - particularly high-income -young adults receive financial transfers from parents at some point during their transition to adulthood. As wealth inequality increased in the last several decades, parental financial transfers may also have become more important for individual outcomes. Coupled with rising college tuition costs, for example, the unequal ability of parents to pay for their children’s postsecondary education could increase inequality in graduation rates or student loan debt, with potentially broad and enduring implications for adult outcomes. Using recently released data from the 2013 Panel Study of Income Dynamics (PSID) Rosters and Transfers Module, I pose two questions. First, how have parental financial transfers for school changed over time? Have they increased along with wealth inequality? Second, what is the relationship between these transfers for school and adult outcomes, including education, income, and wealth?
Spring 2016 Economic Mobility, Assets, and Education Event
AEDI’s work contributes to the growing sense that, in today’s economy, wealth transfers can be not only consistent with the American ethos of effort and ability as the primary determinants of individual outcomes, but, indeed, essential components of one’s personal financial standing. Research has revealed the extent to which transfers undergird the economic security and ascent of the most privileged Americans. AEDI’s analysis of CSAs, for example, layers in educational outcomes and points to transfers designed to improve educational attainment as well-calibrated to bring optimal outcomes and align with American ideals. To continue these conversations, AEDI is planning a spring 2016 event on economic mobility, assets, and education. The convening will feature leading scholars and commentators in this arena and will be designed for the general public as well as the academic community.