Many studies find that parental resources importantly determine children's human capital, schooling returns, and earnings. The collective household approach suggests that, in addition, parental resources of marital partners may importantly affect resource distributions within marriage. This paper presents empirical results consistent with this framework. They suggest that parental wealth continues to play roles in augmenting welfare of children into adulthood beyond provision of human capital in early life-cycle stages or direct financial aid during adulthood, and that actual transfers from parents to adult children do not fully measure influences of parental wealth on behaviors and welfare of adult children.

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Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
2006
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