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Mobility Regimes and Parental Wealth: The United States, Germany, and Sweden in Comparison

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  • Fabian T. Pfeffer
  • Martin Hällsten

Abstract

We study the role of parental wealth for children's educational and occupational outcomes across three types of welfare states and outline a theoretical model that assumes parental wealth to impact offspring's attainment through two mechanisms, wealth's purchasing function and its insurance function. We argue that welfare states can limit the purchasing function of wealth, for instance by providing free education and generous social benefits, yet none of the welfare states examined here provides a functional equivalent to the insurance against adverse outcomes afforded by parental wealth. Our empirical evidence of substantial associations between parental wealth and children's educational success and social mobility in three nations that are marked by large institutional differences is in line with this interpretation and helps us re-examine and extend existing typologies of mobility regimes.

Suggested Citation

  • Fabian T. Pfeffer & Martin Hällsten, 2012. "Mobility Regimes and Parental Wealth: The United States, Germany, and Sweden in Comparison," SOEPpapers on Multidisciplinary Panel Data Research 500, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp500
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    3. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, January.
    4. Robert W. Fairlie & Harry A. Krashinsky, 2012. "Liquidity Constraints, Household Wealth, And Entrepreneurship Revisited," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(2), pages 279-306, June.
    5. Florencia Torche & Seymour Spilerman, 2006. "Parental Wealth Effects on Living Standards and Asset Holdings: Results from Chile," Chapters,in: International Perspectives on Household Wealth, chapter 10 Edward Elgar Publishing.
    6. Belzil, Christian & Leonardi, Marco, 2007. "Can risk aversion explain schooling attainments? Evidence from Italy," Labour Economics, Elsevier, vol. 14(6), pages 957-970, December.
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    8. Klevmarken, N. Anders, 1989. "Introduction," European Economic Review, Elsevier, vol. 33(2-3), pages 523-529, March.
    9. Michael F. Lovenheim, 2011. "The Effect of Liquid Housing Wealth on College Enrollment," Journal of Labor Economics, University of Chicago Press, vol. 29(4), pages 741-771.
    10. Bowles, Samuel, 1972. "Schooling and Inequality from Generation to Generation," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 219-251, Part II, .
    11. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
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    Cited by:

    1. Lykke E. Andersen & Augustus Griffin & Justus J. Krause & Gabriel Orduña Montekio, 2017. "Measuring Equality of Opportunity in Early Childhood: A methodological proposal using Demographic and Health Surveys," Development Research Working Paper Series 04/2017, Institute for Advanced Development Studies.
    2. repec:kap:jecinq:v:15:y:2017:i:3:d:10.1007_s10888-017-9350-1 is not listed on IDEAS

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