IDEAS home Printed from https://ideas.repec.org/p/diw/diwsop/diw_sp500.html
   My bibliography  Save this paper

Mobility Regimes and Parental Wealth: The United States, Germany, and Sweden in Comparison

Author

Listed:
  • Fabian T. Pfeffer
  • Martin Hällsten

Abstract

We study the role of parental wealth for children's educational and occupational outcomes across three types of welfare states and outline a theoretical model that assumes parental wealth to impact offspring's attainment through two mechanisms, wealth's purchasing function and its insurance function. We argue that welfare states can limit the purchasing function of wealth, for instance by providing free education and generous social benefits, yet none of the welfare states examined here provides a functional equivalent to the insurance against adverse outcomes afforded by parental wealth. Our empirical evidence of substantial associations between parental wealth and children's educational success and social mobility in three nations that are marked by large institutional differences is in line with this interpretation and helps us re-examine and extend existing typologies of mobility regimes.

Suggested Citation

  • Fabian T. Pfeffer & Martin Hällsten, 2012. "Mobility Regimes and Parental Wealth: The United States, Germany, and Sweden in Comparison," SOEPpapers on Multidisciplinary Panel Data Research 500, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp500
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.411432.de/diw_sp0500.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Seymour Spilerman & Francois-Charles Wolff, 2012. "Parental wealth and resource transfers: How they matter in France for home ownership and living standards," Post-Print hal-03914532, HAL.
    2. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
    3. Modigliani, Franco, 1988. "The Role of Intergenerational Transfers and Life Cycle Saving in the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 15-40, Spring.
    4. Stephen V. Cameron & Christopher Taber, 2004. "Estimation of Educational Borrowing Constraints Using Returns to Schooling," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 132-182, February.
    5. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, December.
    6. Belzil, Christian & Leonardi, Marco, 2007. "Can risk aversion explain schooling attainments? Evidence from Italy," Labour Economics, Elsevier, vol. 14(6), pages 957-970, December.
    7. Florencia Torche & Seymour Spilerman, 2006. "Parental Wealth Effects on Living Standards and Asset Holdings: Results from Chile," Chapters, in: Edward N. Wolff (ed.), International Perspectives on Household Wealth, chapter 10, Edward Elgar Publishing.
    8. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts," NBER Working Papers 6385, National Bureau of Economic Research, Inc.
    9. Christian Belzil & Marco Leonardi, 2013. "Risk Aversion and Schooling Decisions," Annals of Economics and Statistics, GENES, issue 111-112, pages 35-70.
    10. Michael F. Lovenheim, 2011. "The Effect of Liquid Housing Wealth on College Enrollment," Journal of Labor Economics, University of Chicago Press, vol. 29(4), pages 741-771.
    11. Robert W. Fairlie & Harry A. Krashinsky, 2012. "Liquidity Constraints, Household Wealth, And Entrepreneurship Revisited," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(2), pages 279-306, June.
    12. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 37-89.
    13. Bowles, Samuel, 1972. "Schooling and Inequality from Generation to Generation," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 219-251, Part II, .
    14. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    15. Charles F. Manski, 1993. "Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 43-60, National Bureau of Economic Research, Inc.
    16. Altonji, Joseph G, 1993. "The Demand for and Return to Education When Education Outcomes Are Uncertain," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 48-83, January.
    17. Davies, James B. (ed.), 2008. "Personal Wealth from a Global Perspective," OUP Catalogue, Oxford University Press, number 9780199548897.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Louis Chauvel & Eyal Bar-Haim & Anne Hartung & Emily Murphy, 2021. "Rewealthization in 21st Century Western Countries: The Defining Trend of the Socioeconomic Squeeze of the Middle Class," LIS Working papers 821, LIS Cross-National Data Center in Luxembourg.
    2. Lykke E. Andersen & Augustus Griffin & Justus J. Krause & Gabriel Orduña Montekio, 2017. "Measuring Equality of Opportunity in Early Childhood: A methodological proposal using Demographic and Health Surveys," Development Research Working Paper Series 04/2017, Institute for Advanced Development Studies.
    3. Eleni Karagiannaki, 2017. "The effect of parental wealth on children’s outcomes in early adulthood," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(3), pages 217-243, September.
    4. Trinh, Nhat An & Lersch, Philipp M. & Schunck, Reinhard, 2023. "Dynamics of Wealth Homogamy in Couples," OSF Preprints mxhcp, Center for Open Science.
    5. Fabian T. Pfeffer, 2018. "Growing Wealth Gaps in Education," Demography, Springer;Population Association of America (PAA), vol. 55(3), pages 1033-1068, June.
    6. Eleni Karagiannaki, 2017. "The effect of parental wealth on children’s outcomes in early adulthood," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(3), pages 217-243, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lance J. Lochner & Alexander Monge-Naranjo, 2011. "The Nature of Credit Constraints and Human Capital," American Economic Review, American Economic Association, vol. 101(6), pages 2487-2529, October.
    2. Hassani-Nezhad, Lena & Anderberg, Dan & Chevalier, Arnaud & Lührmann, Melanie & Pavan, Ronni, 2021. "Higher education financing and the educational aspirations of teenagers and their parents," Economics of Education Review, Elsevier, vol. 85(C).
    3. George Bulman & Robert Fairlie & Sarena Goodman & Adam Isen, 2021. "Parental Resources and College Attendance: Evidence from Lottery Wins," American Economic Review, American Economic Association, vol. 111(4), pages 1201-1240, April.
    4. Jeffrey T. Denning & Todd R. Jones, 2021. "Maxed Out?: The Effect of Larger Student Loan Limits on Borrowing and Education Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 56(4), pages 1113-1140.
    5. Steven J. Haider & Kathleen McGarry, 2018. "Postsecondary Schooling and Parental Resources: Evidence from the PSID and HRS," Education Finance and Policy, MIT Press, vol. 13(1), pages 72-96, Winter.
    6. Eleni Karagiannaki, 2017. "The effect of parental wealth on children’s outcomes in early adulthood," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(3), pages 217-243, September.
    7. Eleni Karagiannaki, 2017. "The effect of parental wealth on children’s outcomes in early adulthood," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(3), pages 217-243, September.
    8. Barr, Andrew, 2016. "Enlist or enroll: Credit constraints, college aid, and the military enlistment margin," Economics of Education Review, Elsevier, vol. 51(C), pages 61-78.
    9. FORNERO Elsa & ROMITI Agnese & ROSSI Cristina, 2013. "Does Home Ownership Crowd Out Investment in Children's Human Capital?," LISER Working Paper Series 2013-21, Luxembourg Institute of Socio-Economic Research (LISER).
    10. Lance Lochner & Alexander Monge-Naranjo, 2012. "Credit Constraints in Education," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 225-256, July.
    11. Delavande, Adeline & Zafar, Basit, 2014. "University choice: the role of expected earnings, non-pecuniary outcomes and financial constraints," ISER Working Paper Series 2014-38, Institute for Social and Economic Research.
    12. Philippe Belley & Marc Frenette & Lance Lochner, 2011. "Post-Secondary Attendance by Parental Income in the U.S. and Canada: What Role for Financial Aid Policy?," NBER Working Papers 17218, National Bureau of Economic Research, Inc.
    13. Jeffrey T. Denning, 2019. "Born under a Lucky Star: Financial Aid, College Completion, Labor Supply, and Credit Constraints," Journal of Human Resources, University of Wisconsin Press, vol. 54(3), pages 760-784.
    14. Benjamin W. Cowan, 2016. "Testing for Educational Credit Constraints Using Heterogeneity in Individual Time Preferences," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 363-402.
    15. Hällsten, Martin & Pfeffer, Fabian T., 2017. "Grand advantage: family wealth and grandchildren's educational achievement in Sweden," Working Paper Series 2017:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    16. Benjamin W. Cowan, 2014. "Testing for Educational Credit Constraints using Heterogeneity in Individual Time Preferences," Carlo Alberto Notebooks 345, Collegio Carlo Alberto.
    17. Checchi, Daniele & Fiorio, Carlo V. & Leonardi, Marco, 2014. "Parents' risk aversion and children's educational attainment," Labour Economics, Elsevier, vol. 30(C), pages 164-175.
    18. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 37-89.
    19. Seeun Jung, 2015. "Does education affect risk aversion? Evidence from the British education reform," Applied Economics, Taylor & Francis Journals, vol. 47(28), pages 2924-2938, June.
    20. Helena Skyt Nielsen & Torben Sørensen & Christopher Taber, 2010. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 185-215, May.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp500. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/sodiwde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.