A need to better measure financial support and wealth passed to Millennials

A look at how race affects the financial support given by parents to Millennials includes this bit about measurement:

Shapiro said the numbers of Millennials receiving support from family are “absolutely underestimated” because many survey questions are not as methodical and specific as those a sociologist might ask. “As much as 90 percent of what you’ll hear isn’t picked up in the survey,” he said.

Shapiro’s more careful research found this:

Shapiro’s work pays special attention to the role of intergenerational family support in wealth building. He coined the term “transformative assets” to refer to any money acquired through family that facilitates social mobility beyond what one’s current income level would allow for. And it’s not that parents and other family members are exceptionally altruistic, either. “It’s how we all operate,” Shapiro said. “Resources tend to flow to people who are more needy.”

Racial disparity in transformative assets became especially striking to Shapiro during interviews with middle-class black Americans. “They almost always talk about financial help they give family members. People come to them,” Shapiro said. But when he asked white interviewees if they were lending financial support to family members, he said, “I almost always get laughter. They’re still getting subsidized.”…

To many Millennials, the small influxes of cash from parents are a lifeline, a financial relief they’re hard pressed to find elsewhere. To researchers, however, it’s both a symptom and an exacerbating factor of wealth inequality. In a 2004 CommonWealth magazine interview, Shapiro explained that gifts like this are “often not a lot of money, but it’s really important money. It’s a kind of money that allows families to obtain something for themselves and for their children that they couldn’t do on their own.”

Two quick thoughts:

  1. Americans tend not to like to talk about passing down wealth but decades of sociological research (as well as research from others) shows that it happens frequently and is quite advantageous for those who have wealth passed to them. I recommend looking at Shapiro and Oliver’s book Black Wealth/White Wealth.
  2. Polls like those cited here from USA Today could lead to lots of problems just because the measurement is not great. Why not ask better poll questions in the first place? I understand there are likely limits to how many questions can be asked (it is costly to ask more and longer questions) but I’d rather have sociologists and other social scientists handling this rather than the media.

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