Wealth effects in three mobility regimes: United States, Germany, and Sweden in comparison

Fabian T. Pfeffer, University of Michigan
Martin Haellsten, Swedish Institute for Social Research

A growing body of stratification research suggests that parental wealth plays an important role in the intergenerational transmission of advantage in the United States. This contribution assesses of the role of wealth in the status attainment process of children and young adults across three industrialized nations, the United States, Germany, and Sweden. By doing so, it answers the question of whether the influence of parental wealth on educational and occupational careers is a hallmark of industrialized nations in general or whether some nations may have successfully limited inequalities in opportunities as they arise from the economic wealth of one’s parents. We discuss important differences in the education and welfare state systems of the three countries analyzed here and hypothesize how these relate to the hypothesized mechanisms underlying intergenerational wealth effects. Drawing on survey data from the United States and Germany as well as register data from Sweden, we are able to confirm important intergenerational wealth effects for all three countries. In conjunction with our discussion of relevant aspects of institutional arrangements, these results serve to elucidate some of the causal pathways through wealth may translate into attainment opportunities. In particular, the similarities in the relationship between parental wealth and educational attainment across these three contexts suggest that wealth functions as an important safety net to buffer the universal risks involved in educational careers. Different institutional arrangements may also explain the observed cross-national differences in the relationship between parental wealth and occupational attainment.

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Presented in Session 28: Economics and labor market issues