FTA: "We find that intergenerational earnings persistence is mainly explained by differences in investments received during childhood, which in turn drive differences in cognition, years spent in education, and ultimately lifetime earnings."
So, I don't think it is as simple as your comment.
This is fairly obvious. Live in a household where education is valued, go to a school with good education, surround yourself with kids who also value education. Of course your likelihood for earning better than average will go up. If you grow up in a household where education is not valued, then you will most likely not be able to succeed as easily. Is this somehow controversial?
My parents grew up poor in a war-torn country. They left the country as soon as they could. However, they concentrated on education, and left on scholarships. My family lived a very middle class life but much better than anything my parents lived in. They had the exact same focus on education for me and my siblings. They sacrificed everything for our education. I went to a public school but I studied harder and worked harder than most of my friends, and I'm now a single-digit millionaire, which isn't very much in Silicon Valley but good enough for me. I'm currently retired at this point while I take care of my kids and my wife works because she wants to. My children will get the same focus on education and hard work, the way I did. My family went from poor to rich in a single generation.
Our cleaner is an illegal immigrant from Central America. Her daughter was born in the US and is going to a very prestigious private high school in the Bay Area and has plans of going to Yale. I know she will do it. They are also going from poor to rich in a single generation.
Generational mobility from poor to rich is easily possible, but you can only do it through hard work and education.
Yes, if you bust ass all your life, have parents with professional middle-class values (regardless of actual income) and work in what is likely one of the easiest professions to develop wealth with in a period of time when a software engineer makes an abnormally high income in relationship to peers in other professions, sure, you'll do well.
But that's not really the issue.
The issue is that children of wealthy parents, for sure, study and make an effort to do well in school. But the required effort is just a _fraction_ of what a child of a wealthy parent needs to do.
A wealthy parent can pay for a tutor for a child who doesn't have much interest or curiosity in preparing of standardized tests, and the tutor will guide him/her to the extracurriculars that academics value. By contrast, a poor child with no tutors and no particular desire to do test prep, all other things being equal, just won't do.
What will happen to the child of your cleaner when she wants to attend the expensive vacation holidays of her peers, where undoubtedly a lot of socialization will go on where many will exit college with opportunities that she won't have, because she wasn't in the right place at the right time?
What about if she wants to pursue a career that isn't really profitable for many years? A wealthy teenager can take a gap year, switch careers, pay for a psychiatrist if they have some mental issue that for them will just be a simple obstacle, but for someone without the means can be career-ending.
No one is questioning _your_ ability to reach for success. Just understand that for wealthy people, a lot of your effort was just unnecessary, and they likely arrived at the same place you did with with less stress, better sleep, more parties, many more days off and a lot more opportunity to just take life easy.
Your wealth required you to pick the particular career path that enabled it, but other choices would have likely ended either in poverty or much less wealth. A wealthy child can pursue his or her dream opportunities with far fewer concerns on that front, knowing that they're covered.
My parents came from a much poorer background than me. They busted ass, taught me the same values, still work hard.
Frankly, I just don't work as hard, but I went to a great high school with _very_ wealthy peers who taught me the secrets of the upper classes, and I purposely chose this profession as a software engineer to my advantage, which has allowed me to take gap years, travel the world, and do a lot of things that a lot of my peers, who work much harder, longer hours, and more stressful positions in other industries will never get to do. That's not a declaration of my skills, but rather an assertion of the deep inequality and unfairness of the system.
> what is likely one of the easiest professions to develop wealth with in a period of time when a software engineer makes an abnormally high income in relationship to peers in other professions, sure, you'll do well.
Abnormal even when the value created is considered?
Economic value has almost nothing to do with the human criteria behind choice of careers once a certain level of comfort is achieved, otherwise there wouldn't be a chronic lack of highly paid STEM candidates.
Most people just really don't like doing software no matter how well it pays.
There are certainly outcomes like yours. However if you look at the aggregate statistics, it is rather different.
One can remind oneself that a child neither chooses their genetic inheritance nor their social environment which may lead to a hard-working mentality and the opportunities that comes with studying and making efforts.
If you look at the aggregate statistics, like the outcomes for first and second generation East Asian[1] and South Asian[2] immigrants, which bring with them a distinctly strong cultural emphasis on education, it becomes clear that structural impediments are far easier to overcome than typically claimed.
But I agree that the stickiness of wealth among Americans generally isn't because they actually value education as a tool of mobility. Rather it's more because education is understood as a class signifier; something that's expected of their class. That's why so many wealthy politicians and pundits who claim college is overemphasized and demand that it should be unnecessary for a middle-class lifestyle couldn't even fathom their own kids not going to the best college possible.
And the failure of other groups to achieve what East and South Asian immigrants have is precisely because they've internalized (e.g. whites and blacks) or brought with them (e.g. Mexican immigrants) the same working-class ethic that has always predominated in American culture. In American culture, as in perhaps most cultures around the world, only the elite valued higher education, and they did so for the aforementioned reasons. Not that "go to school" hasn't been oft recited in modern American culture. It's just that it's mostly a half-hearted refrain. American culture values hard work and personal sacrifice above all else, and "book learning" is considered neither hard work nor a sacrifice. Contrast that w/ some other cultures, especially many (but not all) Asian cultures, not to mention European Jewish culture, where formal study is very much considered hard work and a personal sacrifice.
None of which is to say luck isn't involved in individual success. Of course it is. Indeed, to some meaningful degree it's always a factor. But all that tells us is that we should refrain from judging lack of success as a personal failure, not that agency and cultural values are irrelevant to the probability of success.
Also, it goes without saying that a child who grows up w/ and internalizes cultural norms will find it far easier to exercise and apply those norms. As example, someone who never grew up brushing their teeth might find it exceptionally difficult to adopt and maintain that habit as an adult. Whereas someone who grew up doing that would find it difficult to lose that habit. Yet another reason to avoid comparing and judging personal character based on outcomes. At the same time, very clearly norms matters, and some norms are to be preferred over others.
[1] Because of the direct and indirect effects of the Mandarin exam system. But more recently see also [2].
[2] Because they tend to be middle-class self-selected to value, if not having already achieved, significant educational achievement.
100% agree- and only want to add the undeniable advantage that children from two parent households have, which doesn't necessarily require those parents to be rich in order to provide.
It's not luck. My parents busted their ass off to get out of the country.
Same as our cleaner. She illegally immigrated into Mexico first, but realized how racist Mexicans were against Central Americans, so she decided to work her way so that she could get into the US. This isn't luck, it's hard work. She didn't accidentally find herself in the US.
There are people who work just as hard, if not harder who don’t escape terrible situations. If you don’t believe that I don’t know what to tell ya.
Your cleaner lady is such a silly example. If she was deported would you say she didn’t work hard enough to prevent it? Lol
And even if they did work hard your situation is entirely luck regardless since well, you didn’t help them escape with your hard work, yet you benefited.
By your definition, people are poor because of bad luck. I guess according to you, there's nothing anyone can do except rely on luck. Good luck to you, then!
You have two stories, and in both stories, the protagonists are immigrants who prospered when they immigrated to the land of opportunity. They had the ability and willingness, but just didn't have the opportunity.
This is different from people who have been living in the land of opportunity for multiple generations. They have had the opportunity, so that is not the limiting factor. Often it is ability and/or willingness that are limiting factors.
Nevertheless, such rags to riches stories can be found here too: Larry Ellison and Steve Jobs both grew up poor (and were both adopted) but became rich in a single generation.
'The Millionaire Next Door: The Surprising Secrets of America's Wealthy', the author of this book has also pulled together data to show that wealthy families usually end extending financial life-lines to their children. It's not surprising that most wealthy neighborhoods are inhabited with people who are the first generation to become rich sprinkled with a few wealthy inheritors but most of the time the wealth stops with them.
IQ (correlation between IQ and wealth is positive), capital (such as starting a business), and inheritance. I think educational opportunity is important but not as much as the first three.
I think this is at least part of the reason why - rich families have healthier physical environments. Living next to a highway for example will damage your breathing and disrupt your sleep, making you functionally stupider. Having houses built with more expensive premium materials can drastically reduce your exposure to VOCs.
Would be interesting to explore the effects of larger families with educated parents. Poor families do tend to have more children, but it's a boring statistic in my mind. There are many variables that accompany poverty that could easily hold more sway in the child's success. It seems like the coupling of more children means a child is less mentally stimulated being a red herring. Lonely children would seem to be stimulated less than those who can daily interact with their siblings. Also there has to be some value in the child's upbringing with parents who improve their parenting styles over time. It's a bit obvious for anyone that has had a larger family that one makes more parenting mistakes with the first children. Parenting is a learning process after all. Anyways, I think this study is a boring example of bias confirmation by a few P-values without much new information. And like everyone has also some how thought of (why wasn't this mentioned in the study) - inheritance (whether bequeathed or retained) is the elephant in the room.
Been a month since I read it, but if iirc this study examined the relationship between Norwegian adoptive parents and their Korean adopted children. They found, unsurprisingly, that the Korean adopted children tended to be more wealthy, suggesting wealth acquisition traits are culturally learned (to some degree). This conclusion pairs neatly with the op post.
I really don't get these studies of the obvious. Rich children tend to succeed more often because parents can afford better education and they grow up in environments that provide better opportunities, networking, etc. Money provides a head start. period. Why write a paper about what we know since the dawn of humanity?
It isn't interesting why rich parents have rich children, i think there have been many studies on this which basically come to the same conclusions and i think most people find the conclusions obvious (emphasis on education, parents can give a safety cushion for risky ventures, professional/social network from the parents and from going to good schools etc...) I think the harder question and more interesting question is how we can improve the lives of children born into inter generational poverty, with uneducated parents, maybe a broken household, and corresponding "bad" surroundings.
41 comments
[ 1.8 ms ] story [ 30.8 ms ] threadSo, I don't think it is as simple as your comment.
2) Correlations with higher education levels result in a greater emphasis on education for their children
3) Ability to paying for advancement & enrichment opportunities
4) Larger social networks of other successful people that can be tapped for opportunities
My parents grew up poor in a war-torn country. They left the country as soon as they could. However, they concentrated on education, and left on scholarships. My family lived a very middle class life but much better than anything my parents lived in. They had the exact same focus on education for me and my siblings. They sacrificed everything for our education. I went to a public school but I studied harder and worked harder than most of my friends, and I'm now a single-digit millionaire, which isn't very much in Silicon Valley but good enough for me. I'm currently retired at this point while I take care of my kids and my wife works because she wants to. My children will get the same focus on education and hard work, the way I did. My family went from poor to rich in a single generation.
Our cleaner is an illegal immigrant from Central America. Her daughter was born in the US and is going to a very prestigious private high school in the Bay Area and has plans of going to Yale. I know she will do it. They are also going from poor to rich in a single generation.
Generational mobility from poor to rich is easily possible, but you can only do it through hard work and education.
Yes, if you bust ass all your life, have parents with professional middle-class values (regardless of actual income) and work in what is likely one of the easiest professions to develop wealth with in a period of time when a software engineer makes an abnormally high income in relationship to peers in other professions, sure, you'll do well.
But that's not really the issue.
The issue is that children of wealthy parents, for sure, study and make an effort to do well in school. But the required effort is just a _fraction_ of what a child of a wealthy parent needs to do.
A wealthy parent can pay for a tutor for a child who doesn't have much interest or curiosity in preparing of standardized tests, and the tutor will guide him/her to the extracurriculars that academics value. By contrast, a poor child with no tutors and no particular desire to do test prep, all other things being equal, just won't do.
What will happen to the child of your cleaner when she wants to attend the expensive vacation holidays of her peers, where undoubtedly a lot of socialization will go on where many will exit college with opportunities that she won't have, because she wasn't in the right place at the right time?
What about if she wants to pursue a career that isn't really profitable for many years? A wealthy teenager can take a gap year, switch careers, pay for a psychiatrist if they have some mental issue that for them will just be a simple obstacle, but for someone without the means can be career-ending.
No one is questioning _your_ ability to reach for success. Just understand that for wealthy people, a lot of your effort was just unnecessary, and they likely arrived at the same place you did with with less stress, better sleep, more parties, many more days off and a lot more opportunity to just take life easy.
Your wealth required you to pick the particular career path that enabled it, but other choices would have likely ended either in poverty or much less wealth. A wealthy child can pursue his or her dream opportunities with far fewer concerns on that front, knowing that they're covered.
My parents came from a much poorer background than me. They busted ass, taught me the same values, still work hard.
Frankly, I just don't work as hard, but I went to a great high school with _very_ wealthy peers who taught me the secrets of the upper classes, and I purposely chose this profession as a software engineer to my advantage, which has allowed me to take gap years, travel the world, and do a lot of things that a lot of my peers, who work much harder, longer hours, and more stressful positions in other industries will never get to do. That's not a declaration of my skills, but rather an assertion of the deep inequality and unfairness of the system.
Abnormal even when the value created is considered?
Most people just really don't like doing software no matter how well it pays.
One can remind oneself that a child neither chooses their genetic inheritance nor their social environment which may lead to a hard-working mentality and the opportunities that comes with studying and making efforts.
https://plato.stanford.edu/entries/justice-bad-luck/
But I agree that the stickiness of wealth among Americans generally isn't because they actually value education as a tool of mobility. Rather it's more because education is understood as a class signifier; something that's expected of their class. That's why so many wealthy politicians and pundits who claim college is overemphasized and demand that it should be unnecessary for a middle-class lifestyle couldn't even fathom their own kids not going to the best college possible.
And the failure of other groups to achieve what East and South Asian immigrants have is precisely because they've internalized (e.g. whites and blacks) or brought with them (e.g. Mexican immigrants) the same working-class ethic that has always predominated in American culture. In American culture, as in perhaps most cultures around the world, only the elite valued higher education, and they did so for the aforementioned reasons. Not that "go to school" hasn't been oft recited in modern American culture. It's just that it's mostly a half-hearted refrain. American culture values hard work and personal sacrifice above all else, and "book learning" is considered neither hard work nor a sacrifice. Contrast that w/ some other cultures, especially many (but not all) Asian cultures, not to mention European Jewish culture, where formal study is very much considered hard work and a personal sacrifice.
None of which is to say luck isn't involved in individual success. Of course it is. Indeed, to some meaningful degree it's always a factor. But all that tells us is that we should refrain from judging lack of success as a personal failure, not that agency and cultural values are irrelevant to the probability of success.
Also, it goes without saying that a child who grows up w/ and internalizes cultural norms will find it far easier to exercise and apply those norms. As example, someone who never grew up brushing their teeth might find it exceptionally difficult to adopt and maintain that habit as an adult. Whereas someone who grew up doing that would find it difficult to lose that habit. Yet another reason to avoid comparing and judging personal character based on outcomes. At the same time, very clearly norms matters, and some norms are to be preferred over others.
[1] Because of the direct and indirect effects of the Mandarin exam system. But more recently see also [2].
[2] Because they tend to be middle-class self-selected to value, if not having already achieved, significant educational achievement.
That doesn't sounds like "easily possible".
If your family didn’t leave the war torn country you would’ve been screwed.
The same thing with the undocumented immigrant managing to get into the country.
Same as our cleaner. She illegally immigrated into Mexico first, but realized how racist Mexicans were against Central Americans, so she decided to work her way so that she could get into the US. This isn't luck, it's hard work. She didn't accidentally find herself in the US.
Your cleaner lady is such a silly example. If she was deported would you say she didn’t work hard enough to prevent it? Lol
And even if they did work hard your situation is entirely luck regardless since well, you didn’t help them escape with your hard work, yet you benefited.
This is different from people who have been living in the land of opportunity for multiple generations. They have had the opportunity, so that is not the limiting factor. Often it is ability and/or willingness that are limiting factors.
Nevertheless, such rags to riches stories can be found here too: Larry Ellison and Steve Jobs both grew up poor (and were both adopted) but became rich in a single generation.
The fact that your parents invested in education that much means that someone already invested in them and their education way before you were born.
https://www.nasdaq.com/articles/generational-wealth%3A-why-d...
https://money.com/rich-families-lose-wealth/
A similar study.
Been a month since I read it, but if iirc this study examined the relationship between Norwegian adoptive parents and their Korean adopted children. They found, unsurprisingly, that the Korean adopted children tended to be more wealthy, suggesting wealth acquisition traits are culturally learned (to some degree). This conclusion pairs neatly with the op post.