Sharing or Limiting the Wealth? Coresidence, Parental Support, and Wealth Outcomes in Canada

Abstract

This paper examines the relationship between coresidence with adult children, wealth, and economic security using data from the 1999–2012 Canadian Survey of Financial Security (SFS). The results, obtained via propensity score matching and linear regression, show that coresidence with and parental support for adult children is negatively associated with non-home assets and positively associated with debt levels among Canadian households. Further analyses suggest that these relationships stem from differences in financial assets, retirement savings, student loan debt, and credit card balances. By linking theories of economic insecurity, social capital, and life course studies, this study demonstrates how changing trajectories among young adults and financial hardship can influence broader household resources and stability.

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Notes

  1. 1.

    Because Statistics Canada only includes related individuals within the household for its definition of an economic family unit, I am referring to family households when discussing families or households.

  2. 2.

    Missing data were limited due to the survey’s use of imputation. Please see Statistics Canada (2015) for more detail on the SFS imputation procedures.

  3. 3.

    Supplemental models for measures that include home equity and mortgage debt are available upon request.

  4. 4.

    All values are in 2012 $CAD.

  5. 5.

    Partners include married or cohabitating couples and spouses.

  6. 6.

    Results were also robust to 2:1 and 3:1 matching ratios.

  7. 7.

    Results of model diagnostics and balance statistics for the matched samples are available upon request.

  8. 8.

    Because many of these coefficients exceed 0.1, I use the following formula to determine the percent change in assets and debt for a one-unit change in each predictor variable: % Δ(y) = 100 × (eb – 1) (Wooldridge 2009).

  9. 9.

    Models were robust to different specifications of assets and debt that included home equity and mortgages.

  10. 10.

    Because these models are based on the matched sample data, they are not generalizable to the broader population. Results based on the full sample are available upon request.

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Acknowledgements

This research was partially supported by a Social Sciences and Humanities Research Council (SSHRC) Insight Development Grant (#430-2014-00092). This analysis is based on Statistics Canada’s Survey of Financial Security. All empirical work was conducted at the University of Alberta Research Data Center, which is supported by funds to the Canadian Research Data Centre Network (CRDCN) from the Social Science and Humanities research Council (SSHRC), the Canadian Institute for Health Research (CIHR), the Canadian Foundation for Innovation (CFI), and Statistics Canada. Although the research and analysis are based on data from Statistics Canada, the opinions expressed do not represent the views of Statistics Canada or the Canadian Research Data Centre Network.

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Maroto, M. Sharing or Limiting the Wealth? Coresidence, Parental Support, and Wealth Outcomes in Canada. J Fam Econ Iss 40, 102–116 (2019). https://doi.org/10.1007/s10834-018-9588-1

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Keywords

  • Life course perspective
  • Family structure
  • Emerging adulthood
  • Family demography
  • Economic insecurity