Associations Between Financial Transfer from Grandparents and Family Expenditures for Children’s Precollege Education in Japan

Given higher family spending for education and the relative poverty rate in Japan, the recent (2013–2021) tax incentive for grandparents’ support for educational expenditures for children might widen opportunities offered to the younger generation. Using nationally representative data from the 2017 Keio Household Panel Survey (n = 502) and a double-hurdle model, this paper examined the associations between grandparents’ financial contributions and family expenditures for school age children’s education, controlling for family characteristics associated with such expenditures. Although examining just the period when the tax incentive is in effect limited the ability of this study to suggest the findings were related to the incentive, overall, variations in financial support from grandparents were not associated with family expenditures for children’s educations in the multivariate model. Although there was no evidence of an educational advantage from intergenerational transfers during the observation period, financial transfers from grandparents may have served as a substitute for the overall family expenditures for children’s education, thus potentially widening the opportunity gap among children.