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The Correlation of Wealth Between Parents and Children in Australia

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  • Peter Siminski
  • Sin Hung (Timothy) Yu

Abstract

We present the first estimates of intergenerational wealth mobility for Australia. The rank correlation is 0.253, compared to 0.306 for the United States using comparable methods. This correlation varies greatly by child age when wealth is observed, from 0.1 before age 30, to 0.5 after age 40. This sharp increase with age is stronger than for other countries, is not explained by sample selection bias and is not specific to particular types of wealth. We also argue that neither income mobility nor wealth mobility, as operationalised in empirical work, align neatly with the wealth concept in the Becker & Tomes framework.

Suggested Citation

  • 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.
    • Handle: RePEc:bla:ausecr:v:55:y:2022:i:2:p:195-214
    DOI: 10.1111/1467-8462.12461
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    1. 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.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • H00 - Public Economics - - General - - - General

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