Working Paper: CEPR ID: DP1536
Authors: John F. Ermisch
Abstract: The paper develops two models in which parents support their adult child?s human capital investment through financial transfers and/or coresidence. In one, parents are altruistic, and in the other they make loans to children for purely selfish reasons. Econometric estimates using the first four waves of the British Household Panel Study lend more support to the altruistic motivation for support and indicate substitution between the two kinds of support.
Keywords: intergenerational transfers; human capital; coresidence
JEL Codes: D12; J12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| young adults' human capital investment (J24) | likelihood of receiving financial transfers from parents (D14) |
| coresidence with parents (J12) | significant human capital investments through on-the-job training (J24) |
| parental wealth (D14) | financial transfers to young adults (J13) |
| parental wealth (D14) | likelihood of coresidence with parents (J12) |
| financial transfers from parents (F24) | young adults' human capital investment (J24) |