Financial Assistance Patterns from Midlife Parents to Adult Children: A Test of the Cumulative Advantage Hypothesis

Young adults may receive financial assistance from midlife parents as they experience life course transitions often associated with establishing independent status, such as schooling, marriage or gaining full-time work. We used longitudinal data from the Health and Retirement Study (1992 2002) and hypothesized that adult children in the United States who received repeated financial transfers from midlife parents experienced cumulative advantages across time. We also examined the data using parental household characteristics to reinforce the importance of previous transfer behaviors. We found that the receipt of prior transfers, family structure and parental household income were the strongest determinants of the odds that parents gave financial assistance to adult children as both generations aged. The findings also supported the cumulative advantage theory due to the larger likelihood of continued transfers. 2015 Springer Science Business Media New York

Adult children/Cumulative advantage/Intergenerational transfers/Midlife parents

999999