The effect of parental wealth on children’s outcomes inearly adulthood

Eleni Karagiannaki

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper presents the first UK estimates of the association between parental wealth during adolescence and a range of children’s outcomes in early adulthood. Parental wealth is positively associated with all outcomes examined (which include educational attainment, employment, earnings and homeownership). The estimated associations are found to operate over and above parental education and income and in many cases are stronger than them. For labour market outcomes a small share of the association reflects the indirect effect of parental wealth on children’s education whereas for homeownership the estimated association appear to mainly reflect the effect of parental wealth transfers. Further analysis by wealth component shows that degree attainment is more strongly associated with housing wealth than financial wealth. However, important effects are also estimated for financial wealth indicating the existence of financial constraints for low wealth-financial indebted households. For homeownership and earnings the estimated association are stronger for financial wealth.

Keywords: wealth; intergenerational transmission; educational attainment (search for similar items in EconPapers)
JEL-codes: D1 D3 I21 J31 J62 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2012-08
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:51292

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