IDEAS home Printed from https://ideas.repec.org/p/ucl/cepeow/22-01.html
   My bibliography  Save this paper

Parental homeownership and education: the implications for offspring wealth inequality in GB

Author

Listed:
  • Paul Gregg

    (University of Bath)

  • Ricky Kanabar

    (University of Bath)

Abstract

The rapid widening of wealth inequalities has led to sharp differences in living standards in Great Britain. Understanding whether and, separately, the rate at which individuals accumulate particular types of wealth by family background is important for improving wealth and social mobility. We show offspring wealth inequality is driven by housing wealth and holding such wealth is becoming increasingly associated with early life circumstances relating to parental housing tenure and education, even after controlling for adult offspring's own characteristics. Importantly, we find adult offspring whose parents hold a degree and are homeowners are no less likely to report homeownership and housing wealth compared to older cohorts from the same background. Our findings imply the intergenerational rank correlation in housing wealth is set to double in a little over five decades.

Suggested Citation

  • Paul Gregg & Ricky Kanabar, 2022. "Parental homeownership and education: the implications for offspring wealth inequality in GB," CEPEO Working Paper Series 22-01, UCL Centre for Education Policy and Equalising Opportunities, revised Jul 2023.
    • Handle: RePEc:ucl:cepeow:22-01
    as

    Download full text from publisher

    File URL: https://repec-cepeo.ucl.ac.uk/cepeow/cepeowp22-01r2.pdf
    File Function: Second revision, 2023
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Simon H. Boserup & Wojciech Kopczuk & Claus T. Kreiner, 2016. "The Role of Bequests in Shaping Wealth Inequality: Evidence from Danish Wealth Records," American Economic Review, American Economic Association, vol. 106(5), pages 656-661, May.
    2. Ravallion, Martin, 2017. "A concave log-like transformation allowing non-positive values," Economics Letters, Elsevier, vol. 161(C), pages 130-132.
    3. Adrian Adermon & Mikael Lindahl & Daniel Waldenström, 2018. "Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations," Economic Journal, Royal Economic Society, vol. 128(612), pages 482-513, July.
    4. Jo Blanden & Andrew Eyles & Stephen Machin, 2021. "Trends in Intergenerational Home Ownership and Wealth Transmission," CEPEO Working Paper Series 21-05, UCL Centre for Education Policy and Equalising Opportunities, revised May 2021.
    5. Black, Sandra E. & Devereux, Paul J. & Lundborg, Petter & Majlesi, Kaveh, 2015. "Poor Little Rich Kids? The Determinants of the Intergenerational Transmission of Wealth," IZA Discussion Papers 9227, Institute of Labor Economics (IZA).
    6. Paul Gregg & Lindsey Macmillan & Claudia Vittori, 2017. "Moving Towards Estimating Sons' Lifetime Intergenerational Economic Mobility in the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(1), pages 79-100, February.
    7. 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.
    8. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2010. "Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality," The Centre for Market and Public Organisation 10/230, The Centre for Market and Public Organisation, University of Bristol, UK.
    9. Pence Karen M., 2006. "The Role of Wealth Transformations: An Application to Estimating the Effect of Tax Incentives on Saving," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-26, July.
    10. Simon Halphen Boserup & Wojciech Kopczuk & Claus Thustrup Kreiner, 2018. "Born with a Silver Spoon? Danish Evidence on Wealth Inequality in Childhood," Economic Journal, Royal Economic Society, vol. 128(612), pages 514-544, July.
    11. Sandra E Black & Paul J Devereux & Petter Lundborg & Kaveh Majlesi, 2020. "Poor Little Rich Kids? The Role of Nature versus Nurture in Wealth and Other Economic Outcomes and Behaviours," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(4), pages 1683-1725.
    12. Thomas Piketty & Emmanuel Saez, 2014. "Inequality in the long run," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-01053609, HAL.
    13. Ricky Kanabar & Paul Gregg, 2021. "Intergenerational wealth transmission in Great Britain," CEPEO Working Paper Series 21-06, UCL Centre for Education Policy and Equalising Opportunities, revised Apr 2021.
    14. Kerwin Kofi Charles & Erik Hurst, 2003. "The Correlation of Wealth across Generations," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1155-1182, December.
    15. Martin Nybom & Jan Stuhler, 2017. "Biases in Standard Measures of Intergenerational Income Dependence," Journal of Human Resources, University of Wisconsin Press, vol. 52(3), pages 800-825.
    16. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
    17. Juan C Palomino & Gustavo A Marrero & Brian Nolan & Juan G Rodríguez, 2022. "Wealth inequality, intergenerational transfers, and family background [Intergenerational wealth mobility and the role of inheritance: Evidence from multiple generations]," Oxford Economic Papers, Oxford University Press, vol. 74(3), pages 643-670.
    18. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2013. "Intergenerational persistence in income and social class: the effect of within-group inequality," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(2), pages 541-563, February.
    19. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    20. Toru Kitagawa & Martin Nybom & Jan Stuhler, 2018. "Measurement error and rank correlations," CeMMAP working papers CWP28/18, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    21. Pfeffer, Fabian T. & Waitkus, Nora, 2021. "The Wealth Inequality of Nations," SocArXiv 6msuf, Center for Open Science.
    22. repec:ieb:wpaper:2013/6/doc2014-35 is not listed on IDEAS
    23. John Jerrim & Álvaro Choi & Rosa Simancas Rodríguez, 2014. "Two-sample two-stage least squares (TSTSLS) estimates of earnings mobility: how consistent are they?," Working Papers 2014/35, Institut d'Economia de Barcelona (IEB).
    24. John Jerrim & Alvaro Choi & Rosa Simancas Rodriguez, 2014. "Two-Sample Two-Stage Least Squares (TSTSLS) estimates of earnings mobility: how consistent are they?," DoQSS Working Papers 14-17, Quantitative Social Science - UCL Social Research Institute, University College London.
    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. Buscha, Franz & Gorman, Emma & Sturgis, Patrick & Zhang, Min, 2023. "Ethnic differences in intergenerational housing mobility in England and Wales," GLO Discussion Paper Series 1222, Global Labor Organization (GLO).

    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. Kanabar, Ricky & Gregg, Paul, 2022. "Intergenerational wealth transmission and mobility in Great Britain: what components of wealth matter?," ISER Working Paper Series 2022-02, Institute for Social and Economic Research.
    2. Ricky Kanabar & Paul Gregg, 2021. "Intergenerational wealth transmission in Great Britain," CEPEO Working Paper Series 21-06, UCL Centre for Education Policy and Equalising Opportunities, revised Apr 2021.
    3. Jo Blanden & Andrew Eyles & Stephen Machin, 2021. "Trends in Intergenerational Home Ownership and Wealth Transmission," CEPEO Working Paper Series 21-05, UCL Centre for Education Policy and Equalising Opportunities, revised May 2021.
    4. Adrian Adermon & Mikael Lindahl & Daniel Waldenström, 2018. "Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations," Economic Journal, Royal Economic Society, vol. 128(612), pages 482-513, July.
    5. Paul Gregg & Lindsey Macmillan & Claudia Vittori, 2017. "Moving Towards Estimating Sons' Lifetime Intergenerational Economic Mobility in the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(1), pages 79-100, February.
    6. Thomas Epper & Ernst Fehr & Helga Fehr-Duda & Claus Thustrup Kreiner & David Dreyer Lassen & Søren Leth-Petersen & Gregers Nytoft Rasmussen, 2020. "Time Discounting and Wealth Inequality," American Economic Review, American Economic Association, vol. 110(4), pages 1177-1205, April.
    7. 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.
    8. Jo Blanden & Stephen Machin, 2017. "Home ownership and social mobility," CEP Discussion Papers dp1466, Centre for Economic Performance, LSE.
    9. Simon Halphen Boserup & Wojciech Kopczuk & Claus Thustrup Kreiner, 2018. "Born with a Silver Spoon? Danish Evidence on Wealth Inequality in Childhood," Economic Journal, Royal Economic Society, vol. 128(612), pages 514-544, July.
    10. García-Peñalosa, Cecilia & Petit, Fabien & van Ypersele, Tanguy, 2023. "Can workers still climb the social ladder as middling jobs become scarce? Evidence from two British cohorts," Labour Economics, Elsevier, vol. 84(C).
    11. Bertrand Garbinti & Frédérique Savignac, 2020. "Accounting for Intergenerational Wealth Mobility in France over the 20th Century: Method and Estimations," Working papers 776, Banque de France.
    12. Jermaine Toney, 2022. "Is there wealth stability across generations in the U.S.? Evidence from panel study, 1984–2017," Contemporary Economic Policy, Western Economic Association International, vol. 40(4), pages 551-567, October.
    13. Bertha Rohenkohl, 2019. "Intergenerational Income Mobility in the UK:New evidence using the BHPS and Understanding Society," Working Papers 2019017, The University of Sheffield, Department of Economics.
    14. Peter Siminski & Sin Hung (Timothy) Yu, 2022. "The Correlation of Wealth Between Parents and Children in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(2), pages 195-214, June.
    15. Sandra E. Black & Paul J. Devereux & Fanny Landaud & Kjell G. Salvanes, 2022. "The (Un)Importance of Inheritance," CESifo Working Paper Series 9566, CESifo.
    16. Francesco Bloise & Michele Raitano, 2021. "Intergenerational Earnings Persistence in Italy between Actual Father–Son Pairs Accounting for Lifecycle and Attenuation Bias," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(1), pages 88-114, February.
    17. Barbara Castillo Rico, 2020. "Trends in intergenerational homeownership mobility in France between 1960-2015," AMSE Working Papers 2008, Aix-Marseille School of Economics, France.
    18. Peter Levell & David Sturrock, 2023. "Using Understanding Society to study intergenerational wealth mobility in the UK," Fiscal Studies, John Wiley & Sons, vol. 44(4), pages 417-432, December.
    19. Andreas Fagereng & Luigi Guiso & Davide Malacrino & Luigi Pistaferri, 2020. "Heterogeneity and Persistence in Returns to Wealth," Econometrica, Econometric Society, vol. 88(1), pages 115-170, January.
    20. Sandra E Black & Paul J Devereux & Petter Lundborg & Kaveh Majlesi, 2020. "Poor Little Rich Kids? The Role of Nature versus Nurture in Wealth and Other Economic Outcomes and Behaviours," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(4), pages 1683-1725.

    More about this item

    Keywords

    Wealth; Housing; Inequality; intergenerational mobility; Great Britain.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

    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:ucl:cepeow:22-01. 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: Jake Anders (email available below). General contact details of provider: https://edirc.repec.org/data/epucluk.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.