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Intergenerational Influences of Wealth in Mexico

Torche, Florencia; Spilerman, Seymour

Using the 2006 Mexican Social Mobility Survey, this research evaluates the influence of parental wealth on several outcomes of adult children, including educational attainment, consumption level, asset holdings, home ownership, and value of residence. Two mechanisms of parental influence on economic wellbeing are explored: an indirect effect mediated by parental investment in human capital, and the direct transfer of resources. Three main findings emerge from the analysis. First, parental wealth is a strong determinant of educational attainment, net of the standard indicators of advantage regularly used in stratification research, and the influence of wealth is stronger among the most disadvantaged children (those with low cultural capital, and residing in non-urban areas). Second, the mechanism of parental influence on adult children's economic wellbeing differs depending on the outcome: In the case of consumption level, the influence is largely indirect, mediated by parental investment in offspring's human capital, while the opposite is true for children's asset holdings, where a direct transfer of resources predominates. Third, while access to homeownership is only weakly stratified by parent's and children's resources, the value of the acquired home is significantly affected by parental wealth. These patterns of influence are similar to those found in Chile (Spilerman and Torche 2004, Torche and Spilerman 2006) and they highlight the critical impact of parental wealth in less developed countries.

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Academic Units
Institute for Social and Economic Research and Policy
Publisher
Institute for Social and Economic Research and Policy, Columbia University
Series
ISERP Working Papers, 07-14
Published Here
August 16, 2010

Notes

December 2007.

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