DP1536 Parental Support for Human Capital Investment by Young Adults

Author(s): John F Ermisch
Publication Date: December 1996
Keyword(s): Coresidence, Human Capital, Intergenerational Transfers
JEL(s): D12, I22, J12
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1536

The paper develops two models in which parents support their adult child?s human capital investment through financial transfers and/or coresidence. In one, parents are altruistic, and in the other they make loans to children for purely selfish reasons. Econometric estimates using the first four waves of the British Household Panel Study lend more support to the altruistic motivation for support and indicate substitution between the two kinds of support.