Parental Wealth & Social Mobility: The Impact of Wealth Inequality and the State on Intergenerational Income Mobility

Equality of opportunity is a notion rooted in many societies as a conception of importance. The idea that one’s life chances ought to be unrelated to the aspects of one’s background upon which one has no say, such as the material wealth of one’s parents, is generally one that is widely held. The term ‘Intergenerational income mobility’, describing, as it does, the interrelatedness of the incomes of parents with those of their children, is thus too a conception of some importance. Recent studies, looking at cross-sectional income inequality across a range of – primarily advanced – nations, have established a link between income inequality and intergenerational income mobility, suggesting that countries with high income inequality tend also to exhibit lower rates of mobility. With there existing increased attention upon wealth in recent times, and the importance of its magnitude and unequal distribution, this paper sets out to discern the nature of the relationship between wealth – as another marker of material well-being – and intergenerational income mobility, in high-, low-, and middle-income countries. Using mediating factors, state type and the wealth-income ratio, this study finds that wealth inequality is negatively correlated with intergenerational income mobility in high-income countries, and that the results for low- and middle-income countries are, as yet, unclear.Equality of opportunity is a notion rooted in many societies as a conception of importance. The idea that one’s life chances ought to be unrelated to the aspects of one’s background upon which one has no say, such as the material wealth of one’s parents, is generally one that is widely held. The term ‘Intergenerational income mobility’, describing, as it does, the interrelatedness of the incomes of parents with those of their children, is thus too a conception of some importance. Recent studies, looking at cross-sectional income inequality across a range of – primarily advanced – nations, have established a link between income inequality and intergenerational income mobility, suggesting that countries with high income inequality tend also to exhibit lower rates of mobility. With there existing increased attention upon wealth in recent times, and the importance of its magnitude and unequal distribution, this paper sets out to discern the nature of the relationship between wealth – as another marker of material well-being – and intergenerational income mobility, in high-, low-, and middle-income countries. Using mediating factors, state type and the wealth-income ratio, this study finds that wealth inequality is negatively correlated with intergenerational income mobility in high-income countries, and that the results for low- and middle-income countries are, as yet, unclear