Parental Money Help to Children and Stepchildren

Divorce and remarriage have reshaped the American family giving rise to questions about the place of stepchildren in remarried families. In this article, we examine money transfers from a couple to each of their children. We introduce characteristics of the family and estimate the role of shared family membership affecting all children in the family as well as the difference that stepchild status and other individual characteristics make in transfer flows. Data are from the Health and Retirement Study. There are two central results in the analysis. Overall, provision of financial help from parents to children is a family phenomenon. Although help to a particular child is episodic, differences between families in provision of help were much greater than the differences in helping one child versus another within families. Second, stepchild status does differentiate one child from another within a family. Stepchildren are disadvantaged, particularly stepchildren of the wife.