If you are still providing financial assistance to your adult children into their 30s, 40s and even 50s, you are not alone. Each year, 25 to 40 percent of American parents give a loan, substantial gift or other financial assistance to an adult child — and not just to those who are starting out in life.
     A lot of money is changing hands between generations, but parents are rarely the recipients. Understanding how these financial transfers impact family relationships is important because the quality of intergenerational relationships is linked with important outcomes, such as quality of life, health and mental well-being, the care and support of older family members, and even how long we live.
     Unlike the bequests received after the death of a family member, substantial gifts of money or goods, loans or financial assistance from parents to adult children tend to be smaller and unequally distributed among adult children. According to economists, parents with higher incomes are more likely to provide financial help, and adult children in financial need (such as during periods of unemployment) are more likely to receive them. But what role do the subjective aspects, such as affection and conflict, of parent and adult child relationships play in who makes transfers and to whom?
     We have learned from studying your past responses to the Longitudinal Study of Generations surveys that money is among the top issues that contribute to conflict between parents and adult children. This leads to many important questions. Are financial transfers less common when conflict is high between parents and adult children? Or, do they occur more often in close, affectionate relationships? And, do these financial transfers create friction or reinforce solidarity between generations? By studying your responses to questions about financial gifts, sociologist Dr. Beth Mabry, a postdoctoral fellow in gerontology, is learning how they affect and are affected by, the quality of intergenerational relationships.
     In recent surveys (1997 and 2000), about one-third of parents and one-quarter of grandparents in the study gave major gifts of money or goods to an adult child or grandchild. The median amount of these gifts was about $5,000. The patterns among LSOG families parallel national trends. In our research, we found that financial transfers depend on the quality of parent to adult child relationships in addition to the economic circumstances long known to influence monetary support between generations.
     Parents and grandparents with stronger feelings of affection are more likely to provide a gift to an adult child or grandchild. And, in a surprising finding, conflict also increases the odds that parents and grandparents will provide a substantial gift. Although it may seem strange that conflict and transfers could go together, it is not altogether unusual for affection, conflict and help to go hand in hand. It may be that some families are more involved and these families exchange more help, including financial transfers, and experience more conflict as a result of their involvement.
     How do these gifts from parents to adult children impact the intergenerational relationship? Adult children who receive a major gift or financial assistance report decreased conflict with their parents (especially mothers) and increased feelings of affection. This likely represents a “gratitude dividend” in return for the assistance provided to them.
     The subjective dimensions of family relationships, along with economic factors, such as income, appear to contribute to transfers, at least among those making transfer decisions. For example, feelings of closeness facilitate parents’ and grandparents’ transfers down the generational line. And, rather than becoming a source of tensions and conflict, major gifts and financial assistance from older to younger generations appear not to harm intergenerational relationships — at least between those giving and receiving them. Instead, transfers reinforce affective ties between adult children and their parents.
     Among LSOG families, much like American families in general, financial transfers are a prevalent form of support exchanged between generations. Subjective qualities of intergenerational relationships, along with economic factors, are important elements in the context of financial transfers. And, the effect of relationship quality may not always be what we expect, as parents struggle with making transfers. Highly involved families may experience more conflict and exchange more help as a function of the intensity and extent of their interactions — help and conflict sometimes go together.
     Financial transfers are clearly more than economic transactions between family members. They represent social ties between generations, they occur in the context of family relationships, and they influence those relationships. Adult children who receive financial support from older generations enjoy economic benefits, but parents benefit as well because these gifts of support strengthen their children’s bonds of affection with them. In later life this may be important because feelings of closeness and solidarity are related to important outcomes for aging individuals, including aspects of mental and physical health. In the short run, providing financial assistance to members of younger generations seems to be a win-win situation with potential for long-term returns for both younger and older family members.
     Dr. Beth Mabry is very grateful for a recent financial transfer from her own parents who helped her with a down payment on the house she will move into this fall as she completes her postdoctoral training at USC and joins the faculty of Indiana University of Pennsylvania.

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