Featured Research

from universities, journals, and other organizations

Dad's brains mean more to his son's success than his money: Study

Date:
June 21, 2012
Source:
University of Chicago Press Journals
Summary:
Sons of fathers with high incomes tend to end up with higher than average incomes themselves, but new research shows that it's not just dad's money that helps a son on his way.

Sons of fathers with high incomes tend to end up with higher than average incomes themselves, but new research shows that it's not just dad's money that helps a son on his way.

Related Articles


According to a study recently published in the Journal of Political Economy, human capital endowments passed from father to son -- perhaps in the form of smarts, advice, work ethic, or some other intangible -- could be more important to a son's success than the size of dad's paycheck.

"We know there's a correlation between fathers' income and sons'." said David Sims, an economics professor at Brigham Young University and one of the study's authors. "What's gotten less attention is the mechanism. We wanted to see if the intergenerational income correlation is due to money -- what we can buy for our kids -- or if human capital attributes passed from father to son play a role as well."

The problem is that separating the two inputs is tricky. On average, fathers with higher human capital endowments also tend to have higher incomes, so it's hard to tell which factor is doing what. Sims and his colleagues used a statistical model and a rich dataset to try to disentangle the two.

The authors' methodology builds on the following thought experiment. Take two smart, similarly skilled and educated fathers. Say one lived in a town with a robust labor market and he had a big salary. The other father wasn't so lucky. He lived in a town with a depressed labor market, and had much lower earnings despite his comparable human capital. If money is the only thing that matters in the intergenerational transfer of income, then we'd expect that the son of the lucky father would end up with a higher income than the son of the unlucky father. However, if human capital matters, the two sons may end up with more similar incomes.

To test this idea, the researchers used remarkably detailed government administrative data on a large sample of Swedish fathers with sons born between 1950 and 1965. The data included salary information for fathers and sons as well as clues about fathers' human capital: education levels and the nature of their occupations. Fathers with more education or those who work in jobs that require specialized skills are considered to have higher human capital endowments that could be passed to sons.

First, Sims and his colleagues looked for a raw correlation between fathers' incomes and their sons', which, as expected, was quite strong. Then they employed a statistical methodology to isolate differences in fathers' income due to something other than human capital, like in the example of similar fathers who worked in differing labor market conditions. If the income correlation weakens for fathers and sons in these types of situations, the researchers could conclude that money isn't the only thing that matters.

And that's exactly what the study found. Income differences not related to a father's human capital were weaker predictors of a son's income. In other words, human capital matters.

"We can conclude that, for the men in our dataset, differing human capital endowments passed from father to son account for about two-thirds of the overall intergenerational income relationship," Sims said. "We don't offer a final answer here, but we do offer some boundary conditions and present a methodology that could help unravel the question."


Story Source:

The above story is based on materials provided by University of Chicago Press Journals. Note: Materials may be edited for content and length.


Journal Reference:

  1. Lars Lefgren, Matthew J. Lindquist, David Sims. Rich Dad, Smart Dad: Decomposing the Intergenerational Transmission of Income. Journal of Political Economy, 2012; 120 (2): 268 DOI: 10.1086/666590

Cite This Page:

University of Chicago Press Journals. "Dad's brains mean more to his son's success than his money: Study." ScienceDaily. ScienceDaily, 21 June 2012. <www.sciencedaily.com/releases/2012/06/120621195910.htm>.
University of Chicago Press Journals. (2012, June 21). Dad's brains mean more to his son's success than his money: Study. ScienceDaily. Retrieved January 26, 2015 from www.sciencedaily.com/releases/2012/06/120621195910.htm
University of Chicago Press Journals. "Dad's brains mean more to his son's success than his money: Study." ScienceDaily. www.sciencedaily.com/releases/2012/06/120621195910.htm (accessed January 26, 2015).

Share This


More From ScienceDaily



More Mind & Brain News

Monday, January 26, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

How Technology Is Ruining Snow Days For Students

How Technology Is Ruining Snow Days For Students

Newsy (Jan. 25, 2015) More schools are using online classes to keep from losing time to snow days, but it only works if students have Internet access at home. Video provided by Newsy
Powered by NewsLook.com
Weird Things Couples Do When They Lose Their Phone

Weird Things Couples Do When They Lose Their Phone

BuzzFeed (Jan. 24, 2015) Did you back it up? Do you even know how to do that? Video provided by BuzzFeed
Powered by NewsLook.com
Smart Wristband to Shock Away Bad Habits

Smart Wristband to Shock Away Bad Habits

Reuters - Innovations Video Online (Jan. 23, 2015) A Boston start-up is developing a wristband they say will help users break bad habits by jolting them with an electric shock. Ben Gruber reports. Video provided by Reuters
Powered by NewsLook.com
Amazing Technology Allows Blind Mother to See Her Newborn Son

Amazing Technology Allows Blind Mother to See Her Newborn Son

RightThisMinute (Jan. 23, 2015) Not only is Kathy seeing her newborn son for the first time, but this is actually the first time she has ever seen a baby. Kathy and her sister, Yvonne, have been legally blind since childhood, but thanks to an amazing new technology, eSight glasses, which gives those who are legally blind the ability to see, she got the chance to see the birth of her son. It&apos;s an incredible moment and an even better story. Video provided by RightThisMinute
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins