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"My Father was right": The transmission of values between generations

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  • Luc Arrondel

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

Abstract

The influence of parents' savings behaviour on that of their children has often been remarked. This paper attempts to explain this "poids d'Anchise" via a unique French dataset collected by DELTA and TNSSofres in 2002, which contains both savings and subjective information for two or three generations of the same family. Parents' and children's risk and discounting preferences are significantly positively intergenerationally correlated. The correlation coefficients are around 0.25, so that the two preferences are nonetheless far from identical. In addition, the elasticity of children's wealth with respect to that of their parents is around 0.22. This correlation is corrected for the influence of age on wealth, and concerns only co-existing generations, that is before the most significant intergenerational transfers have taken place. The analysis of the raw correlations with a series of explanatory variables reveals that over 40% of this elasticity can be explained by the permanent incomes of the two generations. Each of education and preferences separately account for about 20%, and previous intergenerational transfers for about 13%. When permanent income is controlled for, the contribution of savings preferences is around 13%. The transmission of preferences therefore plays a non-negligible role in the intergenerational transmission of wealth inequalities, but is far from being the most important factor.

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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00566808.

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Date of creation: Apr 2009
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Handle: RePEc:hal:psewpa:halshs-00566808

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Related research

Keywords: saving preferences ; wealth ; intergnerationnal inequalities;

References

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  1. Gourieroux Christian & Monfort Alain & Renault E & Trognon A, 1985. "Simulated residuals," CEPREMAP Working Papers (Couverture Orange) 8502, CEPREMAP.
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Cited by:
  1. Black, Sandra & Devereux, Paul J., 2010. "Recent Developments in Intergenerational Mobility," CEPR Discussion Papers 7786, C.E.P.R. Discussion Papers.
  2. Leuermann, Andrea & Necker, Sarah, 2011. "Intergenerational transmission of risk attitudes: A revealed preference approach," Freiburg Discussion Papers on Constitutional Economics 11/4, Walter Eucken Institut e.V..
  3. Berno Buechel & Tim Hellmann & Michael M. Pichler, 2011. "The Dynamics of Continuous Cultural Traits in Social Networks," Working Papers 457, Bielefeld University, Center for Mathematical Economics.
  4. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," NBER Working Papers 16512, National Bureau of Economic Research, Inc.
  5. Andrea Leuermann & Sarah Necker, 2011. "Intergenerational Transmission of Risk Attitudes: A Revealed Preference Approach," SOEPpapers on Multidisciplinary Panel Data Research 412, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Lars Kunze, 2012. "Like Father, Like Son: Inheriting and Bequeathing," Ruhr Economic Papers 0318, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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