Intergenerational Intervivos Transfers: What is the pattern and level of financial support parents provide their adult children?

Why do parents give their adult children money? What child and parental characteristics influence monetary transfers? Does the effect of these characteristics differ across low, medium, and high transfer dollar amounts? What is the parent's motive behind providing their adult child with a financial transfer? Is it based on the child's income or a life event experienced by the child (i.e., Altruism or contingent exchange)? This research examines the relationship between financial transfers and characteristics of the adult child. The data used are the 1992-1994 Health and Retirement Study (HRS), which contains a nationally representative sample of adults born between 1931 and 1941. At baseline, financial transfers to 18,463 adult children living independently from their parent's household (n = 6,001) are examined. Cross-sectional and longitudinal models are specified to determine the relationship between the financial transfer and characteristics of the adult child, controlling characteristics of the parental household across transfer levels. The motive behind the financial transfer behavior is tested using two competing theories, altruism and contingent exchange. Lastly, the relationship between race and the financial transfer as a percent of total household income is examined. Two variables consistently have the greatest effect on the amount of the financial transfer the adult child

Sociology, Individual and Family Studies (0628)

5032

Available from UMI, Ann Arbor, MI. Order No. DA3018290.