Layers of Inequality: Unequal Opportunities and Skin Color in Mexico

We document the contribution of skin color toward quantifying inequality of opportunity over a proxy indicator of wealth. Our Ferreira–Gignoux estimates of inequality of opportunity as a share of total wealth inequality show that once parental wealth is included as a circumstance variable, the share of inequality of opportunity rises above 40%, overall and for every age cohort. By contrast, the contribution of skin tone to total inequality of opportunity remains minor throughout.

The Impact of Parental Wealth on the Transition to Homeownership in Urban China

Nearly 20 years after the commercialization of housing, the intergenerational dimension of housing attainment in China has not been fully explored. This paper contributes to the literature by examining the impact of parental wealth on adult children’s transitions to homeownership. Young people’s transitions from renting to owning are conditional on leaving the parental home, and conversely, the prospect of purchasing a self-owned residence within a short period of time may play a role in the decision about moving out. As successive transitions are perhaps interlinked with each other through people’s anticipation, I combine a bivariate probit selection model with a discrete time event history analysis to jointly model the timing of nest-leaving and home acquisition. Based on four waves of China Family Panel Survey data, I find that offspring of wealthy parents are more likely to become homeowners and tend to do so sooner than others once they become financially independent from the parental household. In the case of urban China, this paper thereby provides evidence that parents’ assets can give offspring a head start in living standards and portfolio build-up during their early adulthood. This paper reveals that housing acquisition is a critical mechanism through which the newly emergent wealth inequality is transmitted across generations in post-socialist China. Additionally, it develops an innovative strategy to address interdependent life course transitions which potentially have broad applications.

Family Wealth and the Class Ceiling: The Propulsive Power of The Bank of Mum and Dad

In this article we demonstrate that those from working-class backgrounds face a powerful ‘class ceiling’ in elite occupations. Examining how class origin shapes economic returns in the Norwegian upper class (3.8% of the population), we first find that the income advantage enjoyed by those from privileged backgrounds increases sharply as they ascend the income distribution in both elite business and cultural fields. Second, we show that those from economically upper-class backgrounds enjoy the highest pay advantage in all upper-class destinations. Finally, we demonstrate the profound propulsive power provided by parental wealth. Our results indicate that this is the most important single driver of the class-origin income gap in virtually every area of the Norwegian upper class. These findings move forward an emerging literature on class-origin pay gaps beyond mean estimates to reveal the distinct ‘pay-off’ to class privilege in the very highest income-earning positions.

The Impact of Parental Wealth on College Degree Attainment: Evidence from the Housing Boom and Bust

This study provides new evidence on the impact of parental wealth on college degree attainment. Using geocoded data from the Panel Study of Income Dynamics (1968-2017) linked to local housing price data from the Federal Housing Finance Agency, the empirical strategy analyzes parental housing wealth changes induced by local housing booms of the late 1990s-early 2000s and the subsequent housing bust of the 2007-2009 period. 2SLS/IV estimates show parental wealth significantly increases the likelihood of earning a four-year college degree. Moreover, the combined effects of parental income and wealth are significantly greater than the effects of income alone.

Time Discounting and Wealth Inequality

This paper documents a large association between individuals’ time discounting in incentivized experiments and their positions in the real-life wealth distribution derived from Danish high-quality administrative data for a large sample of middle-aged individuals. The association is stable over time, exists through the wealth distribution and remains large after controlling for education, income profile, school grades, initial wealth, parental wealth, credit constraints, demographics, risk preferences, and additional behavioral parameters. Our results suggest that savings behavior is a driver of the observed association between patience and wealth inequality as predicted by standard savings theory. (JEL C91, D15, D31, E21)