IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v9y2022i1d10.1057_s41599-022-01064-0.html
   My bibliography  Save this article

Financial wealth and early income mobility

Author

Listed:
  • Milan van den Heuvel

    (Ghent University)

  • Jan Ryckebusch

    (Ghent University)

  • Koen Schoors

    (Ghent University
    National Research University)

  • Tarik Roukny

    (KU Leuven)

Abstract

We study the interaction between financial wealth and early income growth. Using banking data on career starters in Belgium, we find higher income growth for individuals with higher financial wealth as early as 3 years into a career. While the roles of social capital and innate abilities appear limited, our results suggest that individuals with higher disposable wealth are more likely to find a job matching their human capital, in turn, boosting their chances of higher performance and consequent income growth. Policies addressing individuals’ capacity to accommodate frictions in the market for first jobs could therefore substantially promote economic mobility.

Suggested Citation

  • Milan van den Heuvel & Jan Ryckebusch & Koen Schoors & Tarik Roukny, 2022. "Financial wealth and early income mobility," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-10, December.
    • Handle: RePEc:pal:palcom:v:9:y:2022:i:1:d:10.1057_s41599-022-01064-0
    DOI: 10.1057/s41599-022-01064-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-022-01064-0
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-022-01064-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rendon Sílvio, 2006. "Job Search And Asset Accumulation Under Borrowing Constraints ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 233-263, February.
    2. Baert, Stijn & Cockx, Bart & Verhaest, Dieter, 2013. "Overeducation at the start of the career: Stepping stone or trap?," Labour Economics, Elsevier, vol. 25(C), pages 123-140.
    3. James J. Heckman & Stefano Mosso, 2014. "The Economics of Human Development and Social Mobility," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 689-733, August.
    4. Muriel Niederle & Alvin E. Roth, 2003. "Unraveling Reduces Mobility in a Labor Market: Gastroenterology with and without a Centralized Match," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1342-1352, December.
    5. Raj Chetty & John N. Friedman & Emmanuel Saez & Nicholas Turner & Danny Yagan, 2017. "Mobility Report Cards: The Role of Colleges in Intergenerational Mobility," NBER Working Papers 23618, National Bureau of Economic Research, Inc.
    6. repec:spo:wpmain:info:hdl:2441/9704 is not listed on IDEAS
    7. Bhashkar Mazumder, 2005. "Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 235-255, May.
    8. Gary S. Becker, 1994. "Summary and Conclusions, Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 245-256, National Bureau of Economic Research, Inc.
    9. Sieg, Holger & Wang, Yu, 2018. "The impact of student debt on education, career, and marriage choices of female lawyers," European Economic Review, Elsevier, vol. 109(C), pages 124-147.
    10. Raj Chetty & John N. Friedman & Nathaniel Hilger & Emmanuel Saez & Diane Whitmore Schanzenbach & Danny Yagan, 2011. "How Does Your Kindergarten Classroom Affect Your Earnings? Evidence from Project Star," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 1593-1660.
    11. repec:spo:wpecon:info:hdl:2441/9704 is not listed on IDEAS
    12. Raj Chetty & Nathaniel Hendren, 2018. "The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(3), pages 1107-1162.
    13. Bloemen, Hans G & Stancanelli, Elena G F, 2001. "Individual Wealth, Reservation Wages, and Transitions into Employment," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 400-439, April.
    14. Gary S. Becker, 1994. "Introduction to the Second Edition of Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 3-10, National Bureau of Economic Research, Inc.
    15. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    16. Gary S. Becker, 1994. "Introduction to the First Edition of Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 11-14, National Bureau of Economic Research, Inc.
    17. Steven N. Durlauf & Ananth Seshadri, 2018. "Understanding the Great Gatsby Curve," NBER Macroeconomics Annual, University of Chicago Press, vol. 32(1), pages 333-393.
    18. Thomas Piketty, 2015. "About Capital in the Twenty-First Century," American Economic Review, American Economic Association, vol. 105(5), pages 48-53, May.
    19. repec:hal:pseose:halshs-01053609 is not listed on IDEAS
    20. Christopher A. Pissarides, 2011. "Equilibrium in the Labor Market with Search Frictions," American Economic Review, American Economic Association, vol. 101(4), pages 1092-1105, June.
    21. Li, Hao & Rosen, Sherwin, 1998. "Unraveling in Matching Markets," American Economic Review, American Economic Association, vol. 88(3), pages 371-387, June.
    22. Guner, Nezih, 2015. "Gary Becker’S Legacy On Intergenerational Mobility," Journal of Demographic Economics, Cambridge University Press, vol. 81(1), pages 33-43, March.
    23. Gary S. Becker, 1994. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition," NBER Books, National Bureau of Economic Research, Inc, number beck94-1, March.
    24. repec:cup:jdemec:v:81:y:2015:i:01:p:33-43_00 is not listed on IDEAS
    25. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    26. Gary S. Becker, 1994. "Appendix A, Sources and Methods, Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 351-369, National Bureau of Economic Research, Inc.
    27. Daniela Vandone, 2009. "Consumer Credit in Europe," Contributions to Economics, Springer, number 978-3-7908-2101-7, May.
    28. repec:hal:pseose:halshs-01157487 is not listed on IDEAS
    29. 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.
    30. repec:hal:spmain:info:hdl:2441/9704 is not listed on IDEAS
    31. Wolff, Edward N., 2015. "Inheriting Wealth in America: Future Boom or Bust?," OUP Catalogue, Oxford University Press, number 9780199353958, Decembrie.
    32. repec:hal:wpspec:info:hdl:2441/9704 is not listed on IDEAS
    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. Kris Boudt & Koen Schoors & Milan van den Heuvel & Johannes Weytjens, 2023. "Taming the Zoo of Consumption Responses to Labour Income Changes," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 23/1067, Ghent University, Faculty of Economics and Business Administration.

    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. Lubica Stiblarova & Anna Tykhonenko, 2025. "Talent vs. Hard Work: On the Heterogeneous Role of Human Capital in FDI Across EU Member States," GREDEG Working Papers 2025-11, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    2. Uta Bolt & Eric French & Jamie Hentall-MacCuish & Cormac O'Dea, 2021. "The intergenerational elasticity of earnings: exploring the mechanisms," IFS Working Papers W21/07, Institute for Fiscal Studies.
    3. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Salamanca, Nicolás & Zhu, Anna, 2022. "Intergenerational disadvantage: Learning about equal opportunity from social assistance receipt," Labour Economics, Elsevier, vol. 79(C).
    4. Yannis M. Ioannides, 2022. "Endogenous Social Networks And Inequality In An Intergenerational Setting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1691-1715, November.
    5. A. Bhuvaneskumar & Jithin Benedict & Mahalakshmi Sankar, 2024. "Does Financial Inclusion and Human Development Progress Sustainably? Evidence from Emerging Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 171(1), pages 189-213, January.
    6. Zhang, Xinmiao & Deguilhem, Thibaud, 2022. "Climbing the Social Ladder: Does Intergenerational Solidarity matter?," MPRA Paper 115241, University Library of Munich, Germany.
    7. KonShik Kim, 2024. "Impacts of Early Youth Unemployment Self-Esteem and Quality of Life: Moderating Effects of Career Unemployment," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 19(5), pages 2871-2894, October.
    8. Lara Fleck & Melline Somers & Tom Stolp & Wim Groot & Frits Merode & Ralph Vries, 2025. "The Effectiveness of Interventions to Increase Employment in Education and Healthcare: A Systematic Literature Review," De Economist, Springer, vol. 173(1), pages 1-45, March.
    9. Guo, Ningning, 2022. "Hollowing out of opportunity: Automation technology and intergenerational mobility in the United States," Labour Economics, Elsevier, vol. 75(C).
    10. James Chowhan & Hossein Samavatyan & Farimah HakemZadeh, 2024. "Life Satisfaction and the Roles of Work, Family, and Social Factors in a Social Production Function Framework," Journal of Happiness Studies, Springer, vol. 25(1), pages 1-24, February.
    11. Elias L Khalil, 2024. "Refined tastes, coarse tastes: Solving the stratification-of-goods enigma," Rationality and Society, , vol. 36(3), pages 373-400, August.
    12. Oana Pricopoaia & Adrian Lupașc & Iuliana Oana Mihai, 2024. "Implications of Innovative Strategies for Sustainable Entrepreneurship—Solutions to Combat Climate Change," Sustainability, MDPI, vol. 16(22), pages 1-25, November.
    13. Pham, Thi Trang & Wong, Pui Hang, 2025. "Internet Access and Youth’s Mental Health and Well-being," MERIT Working Papers 2025-007, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Monika Maksim & Dominik Śliwicki, 2025. "Factors Determining Employee Loyalty During the COVID-19 Pandemic," Sustainability, MDPI, vol. 17(1), pages 1-21, January.
    15. Radomir Ray Mitic & Enyu Zhou & Hironao Okahana, 2025. "Factors predicting PhD affirmation and regret in PhD holders," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-9, December.
    16. Abdiaziz Abdullahi Hussein (Mubarak), 2024. "Human Capital Investment in Universities: A Case Study of Gedo International University," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(11), pages 2298-2316, November.
    17. Patrinos,Harry Anthony, 2023. "The Longer Students Were Out of School, the Less They Learned," Policy Research Working Paper Series 10420, The World Bank.
    18. Alex Bell & Raj Chetty & Xavier Jaravel & Neviana Petkova & John Van Reenen, 2019. "Who Becomes an Inventor in America? The Importance of Exposure to Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 647-713.
    19. Hanol Lee & Jong‐Wha Lee, 2021. "Patterns and determinants of intergenerational educational mobility: Evidence across countries," Pacific Economic Review, Wiley Blackwell, vol. 26(1), pages 70-90, February.
    20. Ke Meng & Shouhao Li, 2023. "Welfare Regimes and Intergenerational Social Mobility: An Institutional Explanation of the Great Gatsby Curve," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(1), pages 355-375, January.

    More about this item

    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:pal:palcom:v:9:y:2022:i:1:d:10.1057_s41599-022-01064-0. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/ .

    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.