Dynastic Capital and the Inheritance of Social Advantage

We use population-wide Norwegian administrative data to examine how social capital is transmitted across generations. We construct a multidimensional measure of families’ social position based on six dimensions: elite education, elite occupation, executive status, corporate elite, elite positions in top firms, and elite residential tract. Social capital is highly persistent across generations and strongly predicts children’s long-run income and access to elite positions, even conditional on parental income, wealth, education, and cognitive ability. Horse-race regressions suggest that social capital is a distinct dimension of inherited advantage that is quantitatively as important as parental income and cognitive ability in shaping children’s outcomes. Moreover, the influence of social capital grows over the life cycle, and reaching the very top of the income distribution typically requires both high inherited income and high inherited social capital. Accounting for social capital also meaningfully alters conventional estimates of income-based mobility, indicating that part of what is typically attributed to inherited income reflects the transmission of social position. Quasi-experimental evidence from adoption placements and parental lottery prizes suggests that these patterns primarily reflect environmental transmission rather than genetic inheritance or direct financial resources.