The long arm of parental advantage: Socio-economic background and parental financial transfers over adult children’s life courses

Abstract:

Social-science scholarship has established that high socio-economic status parents make greater investments in their children, contributing to inequalities in child outcomes. Yet we know comparatively little about whether or not—and if so how—these parents continue to advantage their offspring throughout their adult lives. In this paper, we use a life-course approach to theorize the dynamics of parental financial transfers over children’s adult life courses, and how these may differ by socio-economic background. We then leverage high-quality Australian survey data (Household, Income and Labour Dynamics in Australia Survey 2001–2018; n = 108,905 observations and 18,611 individuals) and generalized structural equation models for panel data to test the theoretical predictions. We found that adult children from higher socio-economic backgrounds received more transfers and larger amounts than adult children from lower socio-economic backgrounds, with differences being most pronounced during young adulthood. Importantly, these differences emerged in models adjusted for a range of variables capturing adult children’s socio-economic circumstances, including their income levels. Additional analyses indicated that adult children’s life-course events and transitions (e.g., getting married, entering home-ownership, and attending college) increased the probability and amount of parental financial transfers; yet there were no differences in their effects by socio-economic background.