Parents' Economic Support of Young-Adult Children: Do Socioeconomic Circumstances Matter?

Deborah Cobb-Clark and Tue Gorgens (tue.gorgens@anu.edu.au)
Additional contact information
Tue Gorgens: Australian National University

No 6376, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper assesses how the economic support provided by parents to young adults as they complete their education and enter the labor market is related to the family's socioeconomic circumstances. We address this issue using detailed survey data on intergenerational co-residence and financial transfers merged with nearly a decade of administrative data on the family's welfare receipt while the young person was growing up. We find that young people who experience socioeconomic disadvantage are more likely to be residentially and financially independent of their parents than are their peers growing up in more advantaged circumstances. This disparity is larger for financial transfers than for co-residence and increases as young people age. Moreover, there is a clear link between parental support and a young person's engagement in study and work which is generally stronger at age 20 than at age 18 and is often stronger for advantaged than for disadvantaged youths. We find no evidence, however, that a lack of parental support explains the socioeconomic gradient in either studying or employment.

Keywords: co-residence; financial transfers; socioeconomic disadvantage; youth outcomes (search for similar items in EconPapers)
JEL-codes: J12 J13 J22 J24 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2012-02
New Economics Papers: this item is included in nep-dem
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Citations: View citations in EconPapers (4)

Published - published in: Journal of Population Economics, 2014, 27 (2), 447-471

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Related works:
Journal Article: Parents’ economic support of young-adult children: do socioeconomic circumstances matter? (2014)
Working Paper: Parents' Economic Support of Young-Adult Children: Do Socioeconomic Circumstances Matter? (2012)
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