Humboldt-Universität zu Berlin - Sociology of Social Policy

The intergenerational reproduction of wealth inequality and its socio-demographic conditions in Germany

Wealth inequality has reached historically high levels in many rich democracies. Intergenerational wealth reproduction that cause adult children to occupy similar wealth positions compared to their parents at a similar age are particularly relevant to understanding the emergence of inequalities. In addition to direct wealth transfers, there are also crucial indirect processes of reproduction, e.g. investing in children's education. We expect that the reproduction of wealth is critically influenced by socio-demographic conditions, i.e. socially structured partner choice, fertility, and mortality. Therefore, this project uses a multi-generational life course perspective to investigate the intergenerational wealth reproduction and its socio-demographic conditions in Germany, taking gender differences into account. Specifically, the project pursues the goals of (1) comprehensively describing the extent of intergenerational wealth reproduction in Germany, (2) comparing the extent of wealth reproduction in Germany internationally, (3) identifying the relevant socio- demographic conditions of wealth reproduction for the next generation from the parents' perspective, (4) identifying the relevant socio-demographic conditions of wealth reproduction from the children's perspective, and (5) describing and explaining the gender differences in wealth reproduction in Germany. Secondary data from the Socio-economic Panel (SOEP) for five waves are used. A sustainable improvement of the data infrastructure for wealth in Germany is achieved by making wealth data for 1988 from the SOEP publically accessible. The data are analysed using combined retrospective and prospective approaches. The combination of both approaches enables the generation of complementary knowledge about wealth reproduction. We mainly apply multi-level models to estimate sibling correlations and intergenerational correlations in wealth and apply modern methods of longitudinal analysis such as marginal structural models with inverse probability of treatment weighting. The results from Germany are compared internationally through parallel analyses for the USA. The project creates new knowledge about the rigidity of the German social structure and the influence of socio-demographic processes on the reproduction of inequality over time. This knowledge can generate important social policy implications.

This project is funded by the German Research Foundation. It is conducted together with Markus Grabka (SOEP/DIW Berlin) and Daniel Schnitzlein (Leibniz University of Hannover).