Intergenerational Financial Transfers and Young Adults' Transitions In and Out of the Parental Home

Over the last few decades, youth have been delaying leaving the parental home and increasingly returning to it, often making these transitions for reasons other than marrying, such as to pursue education or employment. Concurrently, parental financial support to their young adult children has risen, partly redefining the meaning of residential independence, a major marker of the transition to adulthood. Using data from the National Longitudinal Study of Adolescent to Adult Health and Markov models, I examine transitions into and out of the parental home and their association with intergenerational financial transfers. Results show high prevalence of partial independence-that is, not living with parents but receiving financial assistance from them-with significant differences depending on college attendance and socioeconomic status (SES). Attending a four-year college increases the likelihood that youth subsequently live independently without parental financial support, although monetary transfers throughout college weaken the effect. Youth from high SES are more likely to leave the parental home, but typically with financial assistance from their parents; their higher likelihood of continued financial dependence raises concerns of prolonged dependence. Results also suggest that full or partial independence may lead youth from lower socioeconomic backgrounds into renewed dependence on their parents, later.