Intergenerational Transmission of Economic Strain and High School Dropout

Ana I. Moro Egido () and Maria Navarro ()
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Ana I. Moro Egido: Department of Economic Theory and Economic History, University of Granada.
Maria Navarro: Departament of Applied Economics, University of Granada.
Authors registered in the RePEc Author Service: Ana Isabel Moro-Egido

No 23/07, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: In this paper, we evaluate the role of parental financial difficulties in the intergenerational transmission of material deprivation. To this end, we use data from the specific module ’Intergenerational transmission of disadvantages’ included in the EU-SILC survey for the years 2005, 2011 and 2019. Our contribution relies on the distinction between the direct effect of parental difficulties on adults’ material deprivation (intergenerational transmission) and the indirect effect through educational achievement (particularly high school dropouts). Our findings suggest that, as expected, parental financial difficulties increase the probability of dropping out (indirect effect), which in turn increases their children’s intensity of household material deprivation in adulthood. The intergenerational link exists and is stronger for early leavers (direct effect). The mechanisms behind these results are lone parenthood, non-highly educated mothers and non-working fathers. We also find that intergenerational transmission differs by country characteristics. More specifically, the poorer and less equal the country, the stronger the intergenerational link. Our results highlight the importance of childhood interventions as an additional channel to correct for material deprivation in adulthood and, in general, to tackle the inequality of opportunity and intergenerational poverty.

Keywords: Intergenerational transmission; material deprivation; parental economic strain; high school dropouts. (search for similar items in EconPapers)
JEL-codes: C31 I24 I32 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2023-06-15
New Economics Papers: this item is included in nep-eur and nep-ure
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