The Long Arm of Parental Advantage: Socio-Economic Background and Parental Wealth Transfers over Adult Children’s Life Courses

22 Feb 2018

A wealth of social science scholarship has established that better-off parents make greater investments in their children while they are growing up, contributing to social inequalities in child development and outcomes. Yet we know comparatively little about whether or not, and if so how, better-off parents continue advantaging their children when they become adult. While comparatively fewer studies have focused on this life stage, we know from previous studies that parental wealth transfers are an important means through which parents help their grown-up children.

In this paper, we evaluate differences by socio-economic background (SEB) in wealth transfers (i.e. cash gifts) from parents to adult children (age 18 to 40 years) in contemporary Australia, using 15 years of high-quality, nationally-representative household panel data. Substantively, we advance the field by applying a life-course approach to gain novel insights into how differences in parental wealth transfers by SEB evolve over children’s life courses and whether they are contingent on major life-course events (e.g. getting married, having children, buying a house, or experiencing financial strain). Methodologically, we exploit the panel data to implement a more sophisticated and fit-for-purpose analytic approach than that deployed in previous studies.

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This working paper is published through the ARC Centre of Excellence for Children and Families over the Life Course (Life Course Centre) as a collaboration between ISSR's Yangtao HuangFrancisco (Paco) Perales, and Mark Western.