IDEAS home Printed from https://ideas.repec.org/p/hal/pseptp/halshs-00916604.html
   My bibliography  Save this paper

Are "daddy's boys" just as rich as daddy? The transmission of values between generations

Author

Listed:
  • Luc Arrondel

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

The influence of parents' savings behaviour on that of their children has often been remarked. This paper attempts to explain this "poids d'Anchise" via a unique French dataset collected by DELTA and TNS-Sofres in 2002 (Pat€r survey), which contains both savings and subjective information for two or three generations of the same family. Parents' and children's risk and discounting preferences are significantly positively intergenerationally correlated. The correlation coefficients are around 0.25, so that the two preferences are nonetheless far from identical. In addition, the elasticity of children's wealth with respect to that of their parents is around 0.22. This correlation is corrected for the influence of age on wealth, and concerns only co-existing generations, that is before the most significant intergenerational transfers have taken place. The analysis of the raw correlations with a series of explanatory variables reveals that over 40 % of this elasticity can be explained by the permanent incomes of the two generations. Each of education and preferences separately account for about 20 %, and previous intergenerational transfers for about 13 %. When permanent income is controlled for, the contribution of savings preferences is around 13 %. The transmission of preferences therefore plays a non-negligible role in the intergenerational transmission of wealth inequalities, but is far from being the most important factor.

Suggested Citation

  • Luc Arrondel, 2013. "Are "daddy's boys" just as rich as daddy? The transmission of values between generations," PSE-Ecole d'économie de Paris (Postprint) halshs-00916604, HAL.
    • Handle: RePEc:hal:pseptp:halshs-00916604
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Luc Arrondel & André Masson, 2007. "How to Measure Risk and Time Preferences of Savers," PSE Working Papers halshs-00754914, HAL.
    2. Jo Blanden & Stephen Machin, 2003. "Cross‐Generation Correlations of Union Status for Young People in Britain," British Journal of Industrial Relations, London School of Economics, vol. 41(3), pages 391-415, September.
    3. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
    4. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    5. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    6. Erik Hurst & Annamaria Lusardi, 2004. "Liquidity Constraints, Household Wealth, and Entrepreneurship," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 319-347, April.
    7. Kessler, Denis & Masson, Andre, 1989. "Bequest and Wealth Accumulation: Are Some Pieces of the Puzzle Missing?," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 141-152, Summer.
    8. Luc Arrondel & André Masson, 2010. "French savers in the economic crisis (May 2007?June 2009) : What has changed," PSE-Ecole d'économie de Paris (Postprint) halshs-00754919, HAL.
    9. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    10. Steven F. Venti & David A. Wise, 2001. "Choice, Chance, and Wealth Dispersion at Retirement," NBER Chapters, in: Aging Issues in the United States and Japan, pages 25-64, National Bureau of Economic Research, Inc.
    11. repec:bla:econom:v:46:y:1979:i:184:p:349-62 is not listed on IDEAS
    12. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 645-677.
    13. Kapteyn, Arie & Teppa, Federica, 2011. "Subjective measures of risk aversion, fixed costs, and portfolio choice," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 564-580, August.
    14. Miles S. Kimball & Claudia R. Sahm & Matthew D. Shapiro, 2009. "Risk Preferences in the PSID: Individual Imputations and Family Covariation," American Economic Review, American Economic Association, vol. 99(2), pages 363-368, May.
    15. Seiritsu Ogura & Toshiaki Tachibanaki & David A. Wise, 2001. "Aging Issues in the United States and Japan," NBER Books, National Bureau of Economic Research, Inc, number ogur01-1.
    16. Kerwin Kofi Charles & Erik Hurst, 2003. "The Correlation of Wealth across Generations," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1155-1182, December.
    17. Luc Arrondel & André Masson, 2003. "Stockholding in France," Palgrave Macmillan Books, in: Luigi Guiso & Michael Haliassos & Tullio Jappelli (ed.), Stockholding in Europe, chapter 4, pages 75-106, Palgrave Macmillan.
    18. Lídia Farré & Francis Vella, 2013. "The Intergenerational Transmission of Gender Role Attitudes and its Implications for Female Labour Force Participation," Economica, London School of Economics and Political Science, vol. 80(318), pages 219-247, April.
    19. Gourieroux, Christian & Monfort, Alain & Renault, Eric & Trognon, Alain, 1987. "Simulated residuals," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 201-252.
    20. Arrondel, Luc & Masson, Andre, 2006. "Altruism, exchange or indirect reciprocity: what do the data on family transfers show?," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 14, pages 971-1053, Elsevier.
    21. Ngina S. Chiteji & Frank P. Stafford, 2000. "Asset Ownership Across Generations," Economics Working Paper Archive wp_314, Levy Economics Institute.
    22. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2007. "Accounting for Intergenerational Income Persistence: Noncognitive Skills, Ability and Education," Economic Journal, Royal Economic Society, vol. 117(519), pages 43-60, March.
    23. Luc Arrondel & Cyril Grange, 2006. "Transmission and inequality of wealth: An empirical study of wealth mobility from 1800 to 1938 in France," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(2), pages 209-232, August.
    24. Luigi Guiso & Michael Haliassos & Tullio Jappelli (ed.), 2003. "Stockholding in Europe," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-50267-3, March.
    25. David Cesarini & Christopher T. Dawes & Magnus Johannesson & Paul Lichtenstein & Björn Wallace, 2009. "Genetic Variation in Preferences for Giving and Risk Taking," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 809-842.
    26. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    27. Jellal, Mohamed & Wolff, Francois-Charles, 2002. "Cultural evolutionary altruism: theory and evidence," European Journal of Political Economy, Elsevier, vol. 18(2), pages 241-262, June.
    28. Per Krusell & Anthony A. Smith & Jr., 1998. "Income and Wealth Heterogeneity in the Macroeconomy," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 867-896, October.
    29. Claudia R. Sahm, 2007. "Stability of risk preference," Finance and Economics Discussion Series 2007-66, Board of Governors of the Federal Reserve System (U.S.).
    30. Robert B. Barsky & Miles S. Kimball & F. Thomas Juster & Matthew D. Shapiro, 1995. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Survey," NBER Working Papers 5213, National Bureau of Economic Research, Inc.
    31. John Ameriks & Andrew Caplin & John Leahy, 2003. "Wealth Accumulation and the Propensity to Plan," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 1007-1047.
    32. Corak,Miles (ed.), 2004. "Generational Income Mobility in North America and Europe," Cambridge Books, Cambridge University Press, number 9780521827607, September.
    33. Piketty, Thomas, 2000. "Theories of persistent inequality and intergenerational mobility," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 8, pages 429-476, Elsevier.
    34. repec:dau:papers:123456789/6826 is not listed on IDEAS
    35. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Del Boca, Daniela & Flinn, Christopher & Verriest, Ewout & Wiswall, Matthew, 2023. "Parenting with Patience: Parental Incentives and Child Development," IZA Discussion Papers 16441, Institute of Labor Economics (IZA).
    2. Boris Gershman, 2016. "Long-Run Development and the New Cultural Economics," Working Papers 2016-06, American University, Department of Economics.
    3. Necker, Sarah & Voskort, Andrea, 2014. "Intergenerational transmission of risk attitudes – A revealed preference approach," European Economic Review, Elsevier, vol. 65(C), pages 66-89.
    4. Hübler, Philipp, 2017. "Heritability of time preference: Evidence from German twin data," MPRA Paper 77620, University Library of Munich, Germany.
    5. Luc Arrondel & Nicolas Frémeaux, 2016. "‘For Richer, For Poorer’: Assortative Mating and Savings Preferences," Economica, London School of Economics and Political Science, vol. 83(331), pages 518-543, July.
    6. Kohei Kubota, 2017. "Intergenerational Wealth Elasticity in Japan," The Japanese Economic Review, Springer, vol. 68(4), pages 470-496, December.
    7. Philipp Huebler & Andreas Kucher, 2016. "Ashes to ashes, time to time - Parental time discounting and its role in the intergenerational transmission of smoking," Discussion Paper Series 326, Universitaet Augsburg, Institute for Economics.
    8. Lukas Kiessling & Shyamal Chowdhury & Hannah Schildberg-Hörisch & Matthias Sutter, 2021. "Parental Paternalism and Patience," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2021_03, Max Planck Institute for Research on Collective Goods.
    9. Martín Leites & Gonzalo Salas, 2019. "Intergenerational transmission of preferences for redistribution," Documentos de Trabajo (working papers) 19-20, Instituto de Economía - IECON.
    10. Brown, Heather & van der Pol, Marjon, 2015. "Intergenerational transfer of time and risk preferences," Journal of Economic Psychology, Elsevier, vol. 49(C), pages 187-204.
    11. Luc Arrondel & Nicolas Frémeaux, 2013. ""For richer, for poorer": savings preferences and choice of spouse," Working Papers halshs-00786245, HAL.
    12. Philipp Huebler, 2017. "Heritability of time preference: Evidence from German twin data," Discussion Paper Series 334, Universitaet Augsburg, Institute for Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luc Arrondel, 2009. ""My Father was right": The transmission of values between generations," Working Papers halshs-00566808, HAL.
    2. repec:dau:papers:123456789/6826 is not listed on IDEAS
    3. Luc Arrondel & André Masson, 2013. "Measuring savers' preferences how and why?," PSE Working Papers halshs-00834203, HAL.
    4. Necker, Sarah & Voskort, Andrea, 2014. "Intergenerational transmission of risk attitudes – A revealed preference approach," European Economic Review, Elsevier, vol. 65(C), pages 66-89.
    5. Luc Arrondel & Nicolas Frémeaux, 2016. "‘For Richer, For Poorer’: Assortative Mating and Savings Preferences," Economica, London School of Economics and Political Science, vol. 83(331), pages 518-543, July.
    6. Luc Arrondel & André Masson & Daniel Verger, 2004. "De la théorie à une enquête méthodologique originale," Économie et Statistique, Programme National Persée, vol. 374(1), pages 21-51.
    7. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    8. Jonathan P. Beauchamp & David Cesarini & Magnus Johannesson, 2017. "The psychometric and empirical properties of measures of risk preferences," Journal of Risk and Uncertainty, Springer, vol. 54(3), pages 203-237, June.
    9. Hendricks, Lutz, 2007. "How important is discount rate heterogeneity for wealth inequality?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(9), pages 3042-3068, September.
    10. Liran Einav & Amy Finkelstein & Iuliana Pascu & Mark R. Cullen, 2012. "How General Are Risk Preferences? Choices under Uncertainty in Different Domains," American Economic Review, American Economic Association, vol. 102(6), pages 2606-2638, October.
    11. Zimmermann, Klaus F. & Chowdhury, Shyamal & Sutter, Matthias, 2020. "Economic preferences across generations and family clusters: A large-scale experiment," CEPR Discussion Papers 14998, C.E.P.R. Discussion Papers.
    12. Wölfel, Oliver & Heineck, Guido, 2012. "Parental risk attitudes and children's secondary school track choice," Economics of Education Review, Elsevier, vol. 31(5), pages 727-743.
    13. Luc Arrondel & Nicolas Frémeaux, 2013. ""For richer, for poorer": savings preferences and choice of spouse," Working Papers halshs-00786245, HAL.
    14. Giuseppe Albanese & Guido de Blasio & Paolo Sestito, 2017. "Trust, risk and time preferences: evidence from survey data," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(4), pages 367-388, December.
    15. Arrondel, Luc & Calvo-Pardo, Hector, 2014. "Endogenous non-tradable earnings and households’ demand for risky assets," Discussion Paper Series In Economics And Econometrics 1414, Economics Division, School of Social Sciences, University of Southampton.
    16. Luc Arrondel & André Masson, 2005. "Risk and time preferences: saver types," Working Papers halshs-00590722, HAL.
    17. Ranoua Bouchouicha & Ferdinand M. Vieider, 2019. "Growth, entrepreneurship, and risk-tolerance: a risk-income paradox," Journal of Economic Growth, Springer, vol. 24(3), pages 257-282, September.
    18. Schaewitz, Johannes & Wang, Mei & Rieger, Marc Oliver, 2022. "Culture and Institutions: Long-lasting effects of communism on risk and time preferences of individuals in Europe," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 785-829.
    19. Brown, Heather & van der Pol, Marjon, 2015. "Intergenerational transfer of time and risk preferences," Journal of Economic Psychology, Elsevier, vol. 49(C), pages 187-204.
    20. Brenøe, Anne Ardila & Epper, Thomas, 2022. "Parenting values and the intergenerational transmission of time preferences," European Economic Review, Elsevier, vol. 148(C).
    21. Chevalier, Arnaud & Marie, Olivier, 2024. "Risky moms, risky kids? fertility and crime after the fall of the wall," Journal of Public Economics, Elsevier, vol. 230(C).

    More about this item

    Keywords

    Saving preferences; Wealth; Intergenerational inequalities;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:pseptp:halshs-00916604. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Caroline Bauer (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.