Inequality and class divides in parental transfers to young adults in the United States

TitleInequality and class divides in parental transfers to young adults in the United States
Publication TypeReport
Year of Publication2023
AuthorsFloridi, G
InstitutionSchool of Social and Political Science, University of Edinburgh
CityEdinburgh, United Kingdom

Parental transfers of money and co-residence to young-adult children can serve as means of
status reproduction. Yet, the relationship between inequality and social class gaps in these
forms of parental support is understudied. Inequality may widen socio-economic differentials
in monetary and co-residential transfers, potentially hindering social mobility. I test the
relationship between income inequality and socio-economic divides in parental support to
children aged 22–35 in the United States (U.S.), a context where the economic dependence of
young adults has increased over decades of high or rising inequality. I link state-level inequality
data to longitudinal data on 36,018 parent-child dyads from the Health and Retirement Study
(1992–2018). Using fixed-effects models I investigate how changes in income inequality
within states relate to changes in wealth, income, and educational gradients in parental transfers
over time. As inequality increases, upper-class parents transfer greater amounts of money to
their children, while lower-class parents are less likely to give money, give smaller amounts on
average, and are more likely to provide co-residence. Previous research shows that receiving
large sums of money is related to improved labour and housing market outcomes, while coresidence may restrict economic opportunities among young adults from disadvantaged
backgrounds. In light of this, my findings suggest that rising U.S. inequality may hinder social
mobility by shifting the socio-economic distribution of intergenerational support.

Citation Key13154