Intergenerational Transfer Inflows to Adult Children of Divorce

Megan M. Way, Boston College

Are adult children of divorce shortchanged when it comes to receiving money from their parents? Though there is evidence that divorce lowers the amount an individual parent might give to an adult child, no study so far has summed the transfers given by both parents. This study takes the adult child’s perspective rather than the parents’ perspective, turning around the typical question in the transfer literature, “How much did the parent give?” and asks instead, “How much did the child get?” It is also the first to explicitly examine the effect remarriage has on this amount. I find no effect of divorce or remarriage on the probability of receiving a transfer, nor on the amount received in a selection-corrected regression. For those children who receive a transfer, however, divorce is correlated with an increase in transfer amount, while the father's remarriage is correlated with a lower overall transfer.