Intergenerational Financial Support among Whites, African Americans, and Latinos

Abstract

Recent empirical research has found that interhousehold exchanges of goods and services are more frequent among Whites than among African Americans or Latinos. This study explores racial and ethnic differences in kin support and focuses on financial support that adult children receive from their parents. We decompose the observed group differences in the incidence of adult children's receiving assistance into those explained by behavioral patterns and those explained by resources. Contrary to earlier observations that financial support among poor, minority families is mostly to ease short-term crises, our results suggest that minority parents may be more concerned than White parents with the long-term effects of financial support for their children. When providing financial support, African American and Latino parents, more than White parents, favor adult children who acquire greater human capital resources (education and income). Key Words: African Americans, financial transfers, intergenerational support, Latinos, parents. One apparent conclusion from previous studies on racial and ethnic differences in kin support is that African Americans and Latinos are more likely to live in extended households than are Whites (Angel & Tienda, 1982; Hofferth, 1984). This difference in living arrangements has been the basis of numerous studies that emphasize the importance of kin networks among African American and Latino families. Studies based on ethnographic methods and small-scale surveys have argued for this premise (e.g., Hays & Mindel, 1973; Martin & Martin, 1978; Stack, 1974), and large-scale representative data have confirmed their findings (e.g., Aquilino, 1990; Hofferth, 1984). Recent studies, however, find that the interhousehold exchange of monetary and social support is more frequent among Whites than among African Americans or Latinos, although findings on group differences in some detailed aspects of interhousehold support are not yet conclusive. African American and Latino adult children are less likely than White adult children to receive financial and social support from their parents (Cox & Rank, 1992; Hogan, Eggebeen, & Clogg,1993; Hogan, Hao, & Parish, 1990; McGarry & Schoeni, 1995). It appears that the racial and ethnic patterns of interhousehold assistance vary according to the family context (such as different kin relationships and stages in the life cycle), as well as according to the type of support (e.g., Aytac & Waite, 1992; Eggebeen & Hogan, 1990; Hoyert, 1990; MacDonald, 1989; Silverstein & Waite, 1992; Waite & Harrison,1992). In particular, the lower likelihood of interhousehold kin support among African Americans and Latinos, compared with Whites, does not seem to hold for support for the aged. Among the aged, African Americans receive more informal support than do Whites, whether controlling for income and education or not (Mindel, Wright, & Starrett, 1986). Using data from the National Survey of Families and Households, Silverstein and Waite (1992) find that, controlling for economic and demographic characteristics, middle-aged African American women are less likely than middle-aged White women to provide instrumental support for noncoresiding relatives. After age 65, however, African American women are more likely to receive instrumental support and about as likely as White women to provide such support to noncoresiding relatives or friends. These findings seem to be consistent with the observations that older African Americans serve as an important resource for kin support and that they enjoy higher social status than their White counterparts (Gibson, 1986; Lubben & Becerra, 1987). A major research question in racial and ethnic comparisons of extended family living has been whether the higher prevalence of the extended family among African Americans and Latinos is a way of coping with economic difficulty or is a result of cultural preferences. …