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The Role of Parental Wealth and Income in Financing Children's College Attendance and Its Consequences

Author

Listed:
  • Hotz, V. Joseph

    (Duke University)

  • Wiemers, Emily

    (University of Massachusetts Boston)

  • Rasmussen, Joshua

    (Duke University)

  • Koegel, Kate Maxwell

    (Duke University)

Abstract
This paper examines the influence of parental wealth and income on children's college attendance and parental financing decisions, graduation, and quality of college attended, and whether parental financing affects the subsequent indebtedness of parents and children. We find that higher levels of parents' wealth and income increase the likelihood that children attend college with financial support relative to not attending college, and that parental wealth increases the likelihood that children graduate from college. We show descriptive evidence that parental support for college increases the subsequent level of housing debt that parents hold but does not reduce student debt for children.

Suggested Citation

  • Hotz, V. Joseph & Wiemers, Emily & Rasmussen, Joshua & Koegel, Kate Maxwell, 2018. "The Role of Parental Wealth and Income in Financing Children's College Attendance and Its Consequences," IZA Discussion Papers 11842, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11842
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    References listed on IDEAS

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    Cited by:

    1. Christian Belzil & Arnaud Maurel & Modibo Sidibé, 2021. "Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment," Journal of Labor Economics, University of Chicago Press, vol. 39(2), pages 361-395.
    2. N. Meltem Daysal & Michael F. Lovenheim & David N. Wasser, 2023. "The Intergenerational Transmission of Housing Wealth," CESifo Working Paper Series 10647, CESifo.
    3. Daysal, N. Meltem & Lovenheim, Michael & Siersbæk, Nikolaj & Wasser, David N., 2021. "Home prices, fertility, and early-life health outcomes," Journal of Public Economics, Elsevier, vol. 198(C).
    4. Congrong Ouyang & Sherman D. Hanna & Kyoung Tae Kim, 2019. "Are Asian Households in the U.S. More Likely than Other Households to Help Children with College Costs?," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 540-552, September.
    5. Peter Hinrichs, 2024. "How Much Can Families Afford to Pay for College?," NBER Chapters, in: Financing Institutions of Higher Education, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    effects of parental wealth and income; college attendance and graduation; financing college;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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