Unequal Giving: Monetary Gifts to Children Across Countries and Over Time
Julie M. Zissimopoulos, RAND Corporation
James P. Smith, RAND Corporation
Parental gifts of money to adult children may assist with financing education, a first home or a transitory income shock. Financial transfers however, may extend economic disparities across generations if wealthy parents give resources to their children while middle and lower income households do not. We examine annual gifts of money from parents to adult children in the United States and ten European countries. Utilizing the panel of the Health and Retirement Study, we study the long-run behavior of giving to children across and within families. In the short–term parents gave money to compensate for children’s low earnings or schooling needs. With time, the amount of money children in the same family received and across families became more equal. Over time, the amount received was not enough to affect distribution of resources within or between families across generations although the timing of transfers for education may have a significant impact.
Presented in Session 34: Intergenerational Exchanges across Countries and Societies