Generations Of Advantage. Multigenerational Correlations in Family Wealth

Resource Type
  • Pfeffer, Fabian (Department of Sociology & Institute for Social Research)
  • Killewald, Alexandra (Department of Sociology)
  • University of Michigan
  • Harvard University
Publication Date
Funding Reference
  • Russell Sage Foundation
    • Award Number: 1
  • W. K. Kellogg Foundation
    • Award Number: 0
  • National Institutes of Health
    • Award Number: R01 HD069609
  • National Science Foundation
    • Award Number: 1157698
Free Keywords
  • Abstract

    Inequality in family wealth is high, yet we know little about how much and how wealth inequality is maintained across generations. We argue that a long-term perspective reflective of wealthÿ¢ÿ¿ÿ¿s cumulative nature is crucial to understand the extent and channels of wealth reproduction across generations. Using data from the Panel Study of Income Dynamics that span nearly half a century, we show that a one decile increase in parental wealth position is associated with an increase of about 4 percentiles in offspring wealth position in adulthood. We show that grandparental wealth is a unique predictor of grandchildrenÿ¢ÿ¿ÿ¿s wealth, above and beyond the role of parental wealth, suggesting that a focus on only parent-child dyads understates the importance of family wealth lineages. Second, considering five channels of wealth transmission ÿ¢ÿ¿ÿ¿ gifts and bequests, education, marriage, homeownership, and business ownership ÿ¢ÿ¿ÿ¿ we find that most of the advantages arising from family wealth begin much earlier in the life-course than the common focus on bequests implies, even when we consider the wealth of grandparents. We also document the stark disadvantage of African-American households in terms of not only their wealth attainment but also their intergenerational downward wealth mobility compared to whites.
Temporal Coverage
  • 1968-01-01 / 2015-12-31
    Time Period: Mon Jan 01 00:00:00 EST 1968--Thu Dec 31 00:00:00 EST 2015
Geographic Coverage
  • United States

Update Metadata: 2019-02-04 | Issue Number: 1 | Registration Date: 2019-02-04