Beyond parental wealth: Grandparental wealth and the transition to adulthood

Abstract

This study considers the multigenerational consequences of wealth transmission for the transition to young adulthood. Using a wider set of outcomes than has previously been considered, and by analyzing parental and grandparental wealth simultaneously, this work underscores the salience of multiple generations of wealth as a predictor for young adult well-being. Data comes from the US Panel Study of Income Dynamics on a sample of youth followed from mid-adolescence until the age of 20. Results from linear regression models indicate that parental wealth was associated with increases in the probability of college attendance and steady employment and inversely associated with the likelihood of nonmarital birth and idleness. Grandparental wealth predicted non-educational outcomes at least as well as parental wealth did and explained more variance in young adults’ outcomes when parental wealth was lower. The association between parental wealth and non-educational outcomes suggest that wealth may inform young adults’ broader life course by predicting outcomes other than college attendance. Grandparental wealth may serve a compensatory function for children with low parental wealth. Results suggest that persistently low wealth across multiple generations may impede the successful transition to young adulthood.