Unequal Chances: The Intergenerational Transmission Of Economic Advantage Under Marital Sorting

Inequality perpetuates in the absence of intergenerational mobility. The intergenerational transmission of socioeconomic advantage negates the norm of equality of opportunity. This inequality in opportunities or unequal chances is further strengthened under marital sorting, as assortative marriage matches the affluent with the rich and vice versa. Parental investments in the human capital of children are in part motivated by the prospects of attracting a better partner for their children. Parents care about the earnings capacity or the combined income of the married partners while deciding the marriage of their children. The status of his/her own parents as well as that of the parents of his/her partner influences the economic status of children. This paper explores the intergenerational links in the transmission of economic advantage under such marital sorting. We estimate the intergenerational transmission of education and income between parents and children, and between parents-in-law and daughters-in-law and sons-in-law. The estimated intergenerational transmission is quite substantial and more pronounced in the case of daughters. The elasticity of children's income is strongly positive with respect to in-laws income. The empirical results for education also reveal strong positive assortative mating pattern. Spousal earnings is just as elastic as the children's own earnings with respect to the parents and in-laws education and income.