Financial Support from Parents to Adult Children: A Catalyst for Inequality

Lonneke van den Berg , Netherlands Interdisciplinary Demographic Institute

Parental financial support plays an increasingly important role in the transition to adulthood, as young people face housing shortages, precarious employment, and declining welfare provisions. Because parental wealth and resources are strongly stratified, such transfers may reinforce social inequalities. This paper examines how substantial financial transfers from parents to adult children — those reported to the Dutch tax authorities (minimum €2,900; average €69,000) — contribute to socio-economic inequality in the Netherlands.Using linked administrative data from Statistics Netherlands for the period 2017–2021, I analyse both differences between families (based on parental characteristics) and within families (based on children’s individual characteristics), to capture the role of family socio-economic background and the role of adult children's needs. Moreover, I examine the question whether receiving financial resources explain differences in homeownership among adult children. Logistic and linear regression models are used to predict the likelihood and size of transfers, as well as a mediating role of financial transfers for homeownership outcomes. My initial findings show that large financial transfers are highly stratified by parental wealth and education. Moreover, among recipients, those from the highest wealth quintile received substantially larger amounts, reinforcing cumulative advantages.

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 Presented in Session 96. Intergenerational Relations, Financial Support and Inequalities