FI network member V. Joseph Hotz recently spoke with HCEO about his research studying how parents invest in their children throughout the life cycle.
"We know a lot about how parents make investments in children, especially young children," Hotz says. "But we know less about what happens later in life."
He notes that part of the reason this area of research is lacking is because there is not much data on this population. For this reason, Hotz has spent the last several years investing in new data.
"What motivates me is a concern about the whole issue of rising inequality in the United States," he says. A family's investment, or lack thereof, has lifetime consequences for children in terms of human capital.
Much of Hotz's research has looked at parental investment in higher education, which has changed significantly in recent years as the cost of education continues to increase. He says that many parents have used home equity to help finance their children's education, noting that approximately 15 percent of households with adults 55 years of age or older have some student loan debt, likely debt that was co-signed for their children.
In recent years, Hotz has also studied another post-recession phenomenon: the rise in multi-generational households. In the past twenty years, he says, there has been a steady increase in two- and three-generation households. His recent work looks at the consequences of this changing family dynamic.
Hotz is the Arts and Sciences Professor of Economics at Duke University.