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Parental Investments in College and Later Cash Transfers

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  • Steven J. Haider

    () (Michigan State University)

  • Kathleen McGarry

    (University of California, Los Angeles)

Abstract

Parents often provide generous financial transfers to their adult children, perhaps assisting with college expenses, recognizing major life course events, or cushioning against negative financial shocks. Because resources are limited, a transfer made to one child likely affects transfers made to others in the family. Despite such possibilities, data limitations have led previous authors to focus almost exclusively on a single type of transfer made at a single point in time. Using data from the Health and Retirement Study, we examine the relationships among parental transfers for college and later cash transfers to all children within a family. We find that parents typically spend differentially on the postsecondary schooling of their children but find no evidence that this differential spending is offset by later cash transfers.

Suggested Citation

  • Steven J. Haider & Kathleen McGarry, 2018. "Parental Investments in College and Later Cash Transfers," Demography, Springer;Population Association of America (PAA), vol. 55(5), pages 1705-1725, October.
    • Handle: RePEc:spr:demogr:v:55:y:2018:i:5:d:10.1007_s13524-018-0703-6
    DOI: 10.1007/s13524-018-0703-6
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    1. repec:hka:wpaper:2013-20 is not listed on IDEAS
    2. Steven J. Haider & Kathleen McGarry, 2018. "Parental Investments in College and Later Cash Transfers," Demography, Springer;Population Association of America (PAA), vol. 55(5), pages 1705-1725, October.
    3. McGarry, Kathleen, 2016. "Dynamic aspects of family transfers," Journal of Public Economics, Elsevier, vol. 137(C), pages 1-13.
    4. Lance Lochner & Todd Stinebrickner & Utku Suleymanoglu, 2013. "The Importance of Financial Resources for Student Loan Repayment," Working Papers 2013-020, Human Capital and Economic Opportunity Working Group.
    5. Moshe HAZAN & Hosny ZOABI, 2015. "Sons or Daughters? Sex Preferences and the Reversal of the Gender Educational Gap," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(2), pages 179-201, June.
    6. Sunha Myong & Jungho Lee, 2019. "Self-financing, Parental Transfer, and College Education," 2019 Meeting Papers 106, Society for Economic Dynamics.
    7. Naijia Guo & Charles Ka Yui Leung, 2020. "Do Elite Colleges Matter? The Impact of Elite College Attendance on Entrepreneurship Decisions and Career Dynamics," GRU Working Paper Series GRU_2020_005, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    8. Chih-Chin Ho & Ching-Yang Lin & Cheng-Tao Tang, 2013. "How Do Income and Bequest Taxes Affect Income Inequality? The Role of Parental Transfers," Working Papers EMS_2013_10, Research Institute, International University of Japan.
    9. Julie Zissimopoulos & Johanna Thunell & Stipica Mudrazija, 2020. "Parental Income and Wealth Loss and Transfers to Their Young Adult Children," Journal of Family and Economic Issues, Springer, vol. 41(2), pages 316-331, June.

    More about this item

    Keywords

    Economic demography; Human capital investment; Economics of the family; Inter vivos transfers;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H4 - Public Economics - - Publicly Provided Goods
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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