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Intergenerational Transfers: From Parents To Adult Children And From Adult Children To Parents

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  • Chen, Ming
  • Kinsey, Jean D.

Abstract

The likelihood and amount of money transferred back and forth between parents and their adult children in the United States in 1988 are examined in this study. Using the 1989 Survey of Consumer Finances, conducted for the Federal Reserve Bank, this study finds that 13 percent of families made one or the other of these transfers and that the average amount transferred by parents ($4,754) is about twice the amount transferred by adult children ($2,468). The elasticity of transferes with respect to income is .89 for donor parents and .60 for donor children. A higher percent of middle age parents made transfers to adult children than parents who were younger or older, but the amount of money transferred rose as parents aged. Parental debt was positively associated with higher transfers to children. Intergenerational transfers is often explained by altruism or a generous spirit. This study found that the amount transferred between parents and their adult children is positively correlated with the fact that they also transferred money to other families. It is a modest but notable indication that those who are generous, are generous to all.

Suggested Citation

  • Chen, Ming & Kinsey, Jean D., 1997. "Intergenerational Transfers: From Parents To Adult Children And From Adult Children To Parents," Staff Papers 13431, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:13431
    DOI: 10.22004/ag.econ.13431
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    References listed on IDEAS

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