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The effect of parental wealth on children’s outcomes in early adulthood

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  • Karagiannaki, Eleni

Abstract

Using data from the British Household Panel Survey we show that parental wealth has a positive association with a range of outcomes in early adulthood. The outcome that exhibits the strongest association with parental wealth is higher educational attainment. This association is mainly concentrated at the lower half of the distribution and remains strong after controlling for a wide range confounding family characteristics. Parental wealth also has a positive relationship with children’s employment probability and earnings, although the gradient for both outcomes is rather weak and largely mediated by children’s education. A potential driver of the small size of the latter effects is the young age of the sample.

Suggested Citation

  • Karagiannaki, Eleni, 2017. "The effect of parental wealth on children’s outcomes in early adulthood," LSE Research Online Documents on Economics 68507, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:68507
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    File URL: http://eprints.lse.ac.uk/68507/
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    References listed on IDEAS

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    1. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, vol. 96(4), pages 1308-1320, September.
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    Cited by:

    1. Yoko Niimi, 2018. "Do borrowing constraints matter for intergenerational educational mobility? Evidence from Japan," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 23(4), pages 628-656, October.
    2. Guarini, Giulio & Laureti, Tiziana & Garofalo, Giuseppe, 2020. "Socio-institutional determinants of educational resource efficiency according to the capability approach: An endogenous stochastic frontier analysis," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    3. Jo Blanden & Andrew Eyles & Stephen Machin, 2023. "Intergenerational home ownership," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(2), pages 251-275, June.
    4. Bonacini, Luca & Gallo, Giovanni & Scicchitano, Sergio, 2021. "Sometimes you cannot make it on your own. How household background influences chances of success in Italy," GLO Discussion Paper Series 832, Global Labor Organization (GLO).
    5. Cave, Sophie Nicole & Wright, Megan & von Stumm, Sophie, 2022. "Change and stability in the association of parents' education with children's intelligence," Intelligence, Elsevier, vol. 90(C).
    6. Katerina Gousia, 2023. "Cognitive abilities and long-term care insurance: evidence from European data," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 48(1), pages 68-101, January.
    7. Attari, Muhammad Qasim & Pervaiz, Dr. Zahid & Razzaq Chaudhary, Dr. Amatul, 2017. "Impact of Agricultural Land Inequality on Human Development in Punjab (Pakistan)," MPRA Paper 89070, University Library of Munich, Germany.
    8. Tesfagiorgis, Mussie & Tsegai, Samuel & Mengesha, Tedros & Craft, Jana & Tessema, Mussie, 2020. "The correlation between parental socioeconomic status (SES) and children’s academic achievement: The case of Eritrea," Children and Youth Services Review, Elsevier, vol. 116(C).

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    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D3 - Microeconomics - - Distribution
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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