Working Paper: NBER ID: w25144
Authors: V. Joseph Hotz; Emily E. Wiemers; Joshua Rasmussen; Kate Maxwell Koegel
Abstract: This paper examines the influence of parental wealth and income on children's college attendance and parental financing decisions, graduation, and quality of college attended, and whether parental financing affects the subsequent indebtedness of parents and children. We find that higher levels of parents' wealth and income increase the likelihood that children attend college with financial support relative to not attending college, and that parental wealth increases the likelihood that children graduate from college. We show descriptive evidence that parental support for college increases the subsequent level of housing debt that parents hold but does not reduce student debt for children.
Keywords: Parental Wealth; College Attendance; Student Debt; Financing Education
JEL Codes: I21; I22; I23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Parental income (D31) | Likelihood of children attending college with parental financial support (I22) |
| Parental income (D31) | Likelihood of not attending college (D29) |
| Parental housing wealth (G51) | Likelihood of children graduating from college (I21) |
| Parental financial support for college (I22) | Parents' subsequent indebtedness (G51) |
| Parental financial support for college (I22) | Children's student debt (G51) |