Inequality among Young Adult Siblings, Public Assistance Programs, and Intergenerational Living Arrangements
In this paper we examine the allocation of resources in the form of shared housing provided by parents to their young adult children in the context of a model in which there are multiple optimizing offspring. We set out a framework for estimation that considers the constraints of available data for studying these family interactions, in particular, the problem that the characteristics and decisions of all adult siblings affect parental decisions and thus need to be accounted for in empirical analyses. Application of the intergenerational family framework to longitudinal data on the residence patterns of adult siblings and on state-specific welfare benefits indicates that results concerning cross-sib interactions are not robust to estimation procedure in part because of the difficulty of measuring all adult sib characteristics when families differ in sib-size. An estimation procedure that controls for all permanent and transitory parent characteristics as well as the influence of varying family sizes and sib characteristics, and passes at least one specification test, indicates that family-sib interactions are significant in the parental provision of shared housing.