Intergenerational financial transfers and young adults’ transition in and out of the parental home

Anna Manzoni, North Carolina State University

This paper analyzes the interplay between young adults’ living arrangements and intergenerational financial transfers. Attention is paid to the prevalence of two alternative residential arrangements, co-residence with parents and residential independence from them, as well as to transitions across them. Findings reveal a positive association between parental financial assistance and co-residence: when parents provide financial support, children are more likely to live with them, remain living with them, and return living with them. Residential independence during college does not seem to endure if achieved through parental financial support, as young adults who received financial assistance during college are more likely to return home. Although causal conclusions would be hazardous and mechanisms behind such relation remain hard to disentangle, residential and financial support seem to go hand in hand, which highlights possible patterns of vulnerability and multiple dependence.