The invisible hand: kin network wealth and its impact on wealth transfers
Date
2014
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Publisher
University of Delaware
Abstract
This paper investigates the connections between household wealth inequality, intergenerational transfers of wealth, and kin network wealth inequality. It asks how kin network wealth influences the distribution of intergenerational transfers of wealth for blacks, whites, Asians, and Hispanics and how this relates to resources and need. Using 1999-2011 PSID data, these questions are tested using lagged random effects models of wealth transfers for the whole sample and in race specific models. Results show that higher network wealth is associated with greater wealth transfers, but that the effect is positive only for whites and Hispanics. Resources, class need, and health or unemployment need lead to different levels of wealth transfers for each racial group. The influence of network wealth on intergenerational transfers of wealth has implications for understanding the connections between resources and need, studying the racial wealth gap, and improving asset building policy.