Effects of Marital and Fertility Patterns on the Transmission and Distribution of Wealth

Abstract

Previous literature has discussed the role of assortative mating and of social class differences in fertility on the inheritance of financial wealth and the degree of wealth inequality. This paper argues that assortative mating and differential fertility play the same sort of role in the intergenerational transmission of human wealth. A path model of the intergenerational transmission of human wealth is constructed from correlations taken from the literature. Estimates are then derived of the extent to which permanent income inequality would be reduced by the elimination of assortative mating, of differential fertility, and of unwanted fertility. Social scientists have long been aware of the fact that the size distribution of income and wealth is influenced by fertility and marital patterns. If inheritances are an important part of total wealth (as they certainly are in traditional agricultural societies in which land is the major form of wealth), and if the poor have more children than do the rich, the equilibrium inequality in wealth and income will be greater than in a society where fertility is the same across social classes [22]. Similarly, the degree of assortative mating by inherited wealth will be positively related to the inequality in wealth and income. Marital and fertility patterns also have an effect on the degree of intergenerational social mobility, which could be measured by the correlation between the son's rank in the distribution of wealth or income and that of his father. This correlation will be higher The author is Associate Professor of Economics, University of Maryland. * Research for this paper has been supported by grants from the Office of Economic Opportunity and from the Department of Labor to the Project on the Economics of Discrimination at the University of Maryland. Computer time was made available by the Computer Science Center at the University of Maryland. I would like to acknowledge helpful comments from Barbara Bergmann, John Conlisk, Robert Hauser, Randall Weiss, and the editor while absolving them of all responsibility for any errors. [Manuscript received October 1975; accepted March 1976.] The Journal of Human Resources * XII * 2 This content downloaded from 207.46.13.129 on Wed, 29 Jun 2016 04:23:04 UTC All use subject to http://about.jstor.org/terms