Upward Transfers of Money in Early Adulthood

• In Event: Family Section Roundtables
  In Refereed Roundtable (60 minute): Table 1: Adult Children and Their Parents

Abstract

Research on financial transfers between parents and their young adult children in the United States has focused on downward transfers from parents to children, often neglecting upward transfers from children to their parents until children parents reach old age. This lack of attention to upward transfers from young adult children has likely been fueled by research reporting that young adults are more likely to receive from parents than to give and that assumes upward transfers will be concentrated among subpopulations such as families with low socioeconomic status (SES) or immigrant background. However, young adults may be motivated to give money to their parents not only by parental economic need but also as a way to affirm their own adulthood in the face of prolonged dependence and delayed progress toward traditional markers of adulthood. This potential motivation highlights the role of upward transfers not only as a means of help for economically struggling families but also as a meaningful feature of modern transitions to adulthood. I use data from the Panel Study of Income Dynamics (PSID) 2013 Rosters and Transfers data to explore patterns of upward financial transfers from young adults to their parents. I compare the prevalence of upward transfers across parental education as a proxy for socioeconomic background. I find that, while parental education predicts downward transfers received from parents, the prevalence of upward transfers is consistent across groups defined by parental education. These results suggest that parental need likely does not adequately explain upward transfer behavior of young adults and highlights the need for greater attention to the meaning upward transfers may hold in young adults’ efforts to establish themselves as adults both economically and symbolically.

Author

• Virginia Leiter, Pennsylvania State University