The non-linear relationship between parental wealth and children’s post- secondary transitions in Germany

Abstract

Our paper addresses the relationship between parental wealth and children’s post-secondary transitions. More specifically, we contrast the likelihood of children with an upper secondary degree to make a transition into further education or the labor market with their likelihood to stay inactive, i.e., to engage neither in further education nor in labor market activity (NEET) after leaving school for the first time. While previous research argues that there is a general positive association between parental wealth and children’s educational and occupational transitions, we argue that for children of wealthy parents, this association might be weaker or even negative. Our study focuses on Germany, where wealth has a weak correlation with the traditional measures of parental socio-economic background. For our empirical analyses, we apply data from the German Socio-Economic Panel Study (SOEP) and use binary logistic regression models for discrete-time event history analyses. Although not statistically significant, our results show that the relationship between parental wealth and children’s post-secondary transitions is not linear. Our study contributes to previous research by providing a detailed examination of the potential mechanisms underlying the relationship between parental wealth and children’s post-secondary transitions.