by Ashton Verdery, The Pennsylvania State University and Jonathan Daw, The University of Western Ontario
Financial transfers are a common, consequential, and well-studied aspect of retirees’ family life. Parents tend to give more money to their less well-off children and children give less if their parents or in-laws are wealthy. Similar processes have been observed for other forms of instrumental exchange, where those with greater need receive more gifts of time. Prior work has examined whether these exchanges are motivated by altruism or whether they represent payment for received or expected services. This research has focused on the relative distribution of resources within families and has revealed prominent racial differences in transfer patterns. Recent research estimates that private transfers account for 12 percent of the overall racial wealth gap. However, existing work has neglected important social processes that intervene along the way, namely: 1) the availability of living kin to exchange with, 2) the frequency of contact between living kin as a partial function of geographic proximity and gendered familial roles, and 3) the constellation of family obligations created by these two processes. We propose to add these social and demographic factors into the study of retiree’s exchange patterns to test whether they contribute to racial differences in retiree exchange. We use novel data extracted from the Panel Study of Income Dynamics (PSID) and examine these processes within three specific aims. Aim 1: To use population based kinship network data to test whether racial differences in exchanges among those ages 51-80 in 2010 owe to differences in numbers of living children with emphasis on comparing cohort differences and life-course differences. Aim 2: To use multivariate regression and unique restricted data to explore the likelihood that respondents are in contact with their parents or children conditional on geographic proximity and gender, and to test whether these first-stage results moderate racial, cohort, and age differences in exchange. Aim 3: To examine how individual embeddedness in geographically dispersed, differentially in contact, and gendered family networks affect racial differences in patterns of exchange. In addition to considering proximate determinants and the full context of exchange, our study contributes to the literature by a) comparing between birth cohorts measured at different ages while prior work has focused on earlier birth cohorts or those at pre- and early retirement ages, b) examining data that represents the full range of exchange in contrast to prior work which has tended to use censored data that inflates and otherwise distorts racial discrepancies, and c) paying closer attention to gendered familial roles. This project will expand knowledge on social and demographic processes that shape exchanges as well as the determinants of wealth and retirement incomes.