Parental family income and the socioeconomic attainment of children

Abstract

Like others before us using different data, we find significant effects of parental family income on the completed schooling and wage rates of adult children using intergenerational data from the Panel Study of Income Dynamics. We explore various hypotheses regarding these effects, finding substantial support for the economic hypothesis that income, regardless of its source, is invested by parents in their children; mixed support for the hypothesis that fathers serve as role models for their sons; and no support for the welfare dependency hypothesis. Rather than serving as positive role models, working mothers appear to have significantly less successful sons.