Family Matters: Kin Networks and Asset Accumulation

Abstract

Abstract Social science research has long recognized that the characteristics of an individual’s family and the relationships among family members can have important implications for an individual’s economic outcomes. For example, research has noted that the number of siblings a child has can influence the child’s life chances by affecting the amount of resources that parents are able to devote to the child during critical phases of his or her childhood. More siblings can mean poorer outcomes during adulthood due to resource dilution. Researchers also have investigated the relationships between parents and their adult children, revealing that the desire and ability to control children can affect bequests and that individuals’ labor market prospects and wealth outcomes are influenced by parental bequests and inter vivos transfers. The research in this area offers ample evidence to suggest that significant and transformative transfers are often made from parents to children when the children are adults—in the forms of “gifts” of tuition assistance, down payment assistance for home purchases, or transfers of wealth at death (e.g., Kotlikoff and Summers, 1981; Laitner and Juster, 1996; Oliver and Shapiro, 1995).