Wealth and Economic Mobility

Research Report

Wealth and Economic Mobility

April 3, 2008

Abstract

While earnings are the primary determinant of income in most households, family welfare and consumption are often more related to wealth held either as financial assets or real assets. Because a substantial fraction of the U.S. wealth stock is passed from one generation to the next through inter-vivos transfers and bequests, wealth can have large and important effects on absolute and relative mobility both across and within generations. This review examines the pathways through which wealth influences economic mobility, with an emphasis on its effects on mediating factors like educational investment and neighborhood choice. (Review 11 of 11.)

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