The lasting effect of intergenerational wealth transfers: Human capital, family formation, and wealth.

Published

Journal Article

Recent evidence indicates that inheritances and other intergenerational wealth transfers have only a limited effect on wealth inequality and the intergenerational transmission of financial well-being. In this study, we explore the role that human capital and family formation play in mediating the relationship between receiving a transfer and building wealth. We examine how educational attainment and family formation determine whether or not households are able to convert inheritances into greater assets, facilitating improved wealth accumulation. Using data from the Panel Study for Income Dynamics (PSID), we examine how these factors moderate wealth accumulation trajectories following a bequest or inter vivos gift. Results reveal that educational attainment and marriage each facilitate wealth accumulation following a transfer. Our evidence suggests that cumulative advantage processes produce divergent wealth accumulation trajectories but these are situated in important turning points in the life course.

Full Text

Duke Authors

Cited Authors

  • Benton, RA; Keister, LA

Published Date

  • November 2017

Published In

Volume / Issue

  • 68 /

Start / End Page

  • 1 - 14

PubMed ID

  • 29108589

Pubmed Central ID

  • 29108589

Electronic International Standard Serial Number (EISSN)

  • 1096-0317

International Standard Serial Number (ISSN)

  • 0049-089X

Digital Object Identifier (DOI)

  • 10.1016/j.ssresearch.2017.09.006

Language

  • eng