AHURI Media Release
Thursday, 2 March 2017
‘Bank of Mum and Dad’ helps kids get ahead in education and business start-ups, new research finds
Adult children inheriting or gifted wealth from their parents are more likely to have completed university degrees, be
self-employed and have higher bank account balances, finds a new study.
The report A new look at the channels from housing to employment decisions, undertaken for the Australian Housing and Urban Research Institute (AHURI) by researchers from RMIT University and
Curtin University, explored how intergenerational wealth transfers, which are typically financed through housing wealth,
influence the education and work careers of beneficiaries.
Professor Gavin Wood, one of the report’s authors from the RMIT University Centre for Urban Research, said the report
indicates that although the proportion of beneficiaries in the labour force is roughly the same as non-beneficiaries, a
significantly higher proportion of beneficiaries are self-employed.
“Young Australians that receive inherited wealth and parental cash transfers financed from housing wealth are being
helped by booming house prices,” Professor Wood said.
“They have more financial assets that can act as a buffer to meet income shocks, and collateral to relax borrowing
constraints. Therefore, they may be more likely to take risks, like financing their own business ventures.”
The report also found that people who received cash transfers or bequests from their parents are more likely to hold a
bachelor’s degree, and their average bank deposit account balances are more than double those of non-beneficiaries.
Between 2002 and 2012, approximately 1.8 million Australians inherited money at least once, and the average amount of
each inheritance was $79,000.
While this may seem like good news for young Australians lucky enough to be recipients of housing wealth, this could
entrench and even exacerbate inequality in lifetime economic opportunities, says Professor Wood.
“Intergenerational transfers are an important feature of contemporary family life and housing wealth is an important
direct or indirect funding source for these transfers,” Professor Wood said.
“The evidence presented in this report confirms expectations that intergenerational transfers help beneficiaries to ‘get
ahead’.
“But if intergenerational transfers become increasingly important as a pillar supporting educational, housing and
business start-up opportunities, policy-makers will need to heed the consequences for those children of less well-off
parents who are bypassed by the intergenerational circulation of housing wealth.”
The research report is available to download from the AHURI website at http://www.ahuri.edu.au/research/final-reports/275