Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Mitchell finds children who lose fathers suffer at cellular level

Seefeldt says hard work alone won't allow poor to reach middle-class status in America

Shaefer says proposed plan to cover tax cuts would hurt a lot of struggling Americans

More News

Highlights

Neal Krause wins GSA's Robert Kleemeier Award

MiCDA Research Fellowship - applications due July 21, 2017

U-M awarded $58 million to develop ideas for preventing and treating health problems

Bailey, Eisenberg , and Fomby promoted at PSC

More Highlights

The Correlation of Wealth across Generations

Archived Abstract of Former PSC Researcher

Charles, Kerwin, and Erik Hurst. 2003. "The Correlation of Wealth across Generations." Journal of Political Economy, 111(6): 1155-1182.

In this paper, we find that the age-adjusted elasticity of child wealth with respect to parental wealth is 0.37 before the transfer of bequests. Lifetime income and asset ownership jointly explain nearly two-thirds of the wealth elasticity. Education, past parental transfers, and expected future bequests account for little of the remaining elasticity. Survey measures of risk correlate strongly between parents and children. However, they explain little of the intergenerational similarity in the propensity to own different assets, suggesting that children's savings propensities are determined by mimicking their parents' behavior, or the inheritance of preferences not related to risk tolerance. Our results imply that while parents do pass on human capital and saving propensities to their children, the level of intergenerational fluidity is much greater than that suggested by recent accounts in the popular press.

Browse | Search : All Pubs | Next