Effects of inheritances on educational and professional success and life course across the wealth distribution
Author: Klaus Pforr
Cooperation partners: Nora Müller, Jascha Dräger, Johannes König
Project description:
The project continues our research on the intergenerational transmission of status with a special focus on wealth (Dräger & Müller, 2019; Müller, Pforr, & Hochman, 2017; Skopek, 2015; Skopek, Buchholz, & Blossfeld, 2014; Skopek, Kolb, Buchholz, & Blossfeld, 2012). We address the importance of wealth as an additional measure of parents' socioeconomic background when analyzing socioeconomic background on educational decisions and children's life course in general. Within the WATT research network, we plan to conduct two analyses. While in the first study we want to test a specific hypothesis for a certain stage of life, the second study is more explorative and refers to the entire life course. First, we want to examine the effects of parental wealth on post-secondary transitions. Here we rely on inheritances as a proxy for parental wealth, because although we could analyze the actual wealth of respondents' parents, this would result in a very small analysis sample size. The particular advantage of the additional sample of very affluent individuals is that we have a more solid basis for the expected non-linear effects of affluence on educational and occupational choice (e.g. Müller et al., 2017). By distinguishing between further education, labor market and NEET (neither in further education nor in the labor market), we expect a non-linearity of the wealth effect for the duration of NEET status and for the duration until the transition to tertiary education. Furthermore, we expect very affluent individuals to choose riskier educational and occupational careers with less direct monetary benefits compared to moderately affluent individuals. Second, we want to analyze the changes in life course patterns after receiving inheritances or large gifts. Most previous research has focused on short-term changes in labor supply, self-employment, and the timing of retirement.In contrast, we focus on broader occupational trajectories using a sequence data analysis of retrospective life course data.
This approach allows us to examine changes in overall career patterns that may result from inheritance. In addition, (1) anticipation effects, (2) the effects of multiple (large) inheritances, (3) heterogeneous effects depending on the timing of inheritances, and (4) heterogeneous effects depending on the previous life course.