The Impact of Parental Transfers on Living Standards of Married Children

The paper focuses on the effect of various forms of parental assistance (i.e.financial support to meet living expenses, purchase of housing, fundingeducation) on living standards (i.e., possession of material goods). Analysisof the data from the Israeli sample reveals a considerable variation amongfamilies with regard to parental support. The data demonstrate that supportis more prevalent among families of high socioeconomic origin (and ofsmaller size) than among families of low socioeconomic origin. Parentalsupport, in turn, significantly affects current standard of living (i.e.number of household goods in possession of the family). That is, familiesthat have benefited from extensive support are more likely to maintainhigher living standards net of social resources and labor market outcomes.The effect of support for education is mediated via labor market outcomes,whereas the impact of support toward purchase of home is direct and netof labor market rewards. The findings revealed by the analysis suggest,rather strongly, that parental transfers not only reproduce but mayactually increase economic inequality across generations. The meaning offindings are discussed in light of theories of social stratification andinequality.