Abstract

We study how wealth contributes to intergenerational inequality transmission in several dimensions of socio-economic status, SES: education, occupation, income and wealth. We use Swedish administrative registers, which contains unusually rich measures of these SES dimensions over individual’s lives for both parents and children’s generations. Parents’ SES are measured throughout their lives with a focus on end-of-career statuses, while children’s SES is assessed in the mid to late career, around age 50. We use sibling correlations to get the total effect of family background and then decompose this correlation to find the gross and net influence the SES dimensions and for their overlaps.

We find that: (1) SES can explain up to 50 percent of family background ; (2) most of the SES effect belongs to the overlap of parent’s  education, occupation and income; (3) Over and above parent’s  education, occupation and income, wealth adds another 5 percentage points of explanation for children’s education, occupation and income; this is on a par with the largest of net contributions of parent’s education, occupation and income (4) in a comparison of relative contributions, parents’ wealth underlies 15-20 percent of the total SES effect for children’s education, occupation and income, 35 percent for children’s income and 80 percent for children’s wealth  (5) wealth moderates intergenerational reproduction in other dimensions: The wealthiest have higher rates of reproduction in children’s occupation, income, and wealth, compared to for those with highest education, income or occupational prestige. We conclude that wealth is an important but also a somewhat unique dimension of social stratification.