Eric Hanushek, Babs Jacobs, Guido Schwerdt, Rolf van der Velden, Stan Vermeulen, Simon Wiederhold, 22 February 2022

Parents influence their children in many ways, but which family features actually cause the strong intergenerational linkages that we observe? This column presents the first causal evidence on cognitive skill transmission in the family. Using Dutch survey and registry data, the authors show that parents’ maths and language skills strongly affect the same skills in their children, and that skills within dynasties are not just genetically determined but are significantly affected by educational experiences. This highlights the importance of good educational environments in alleviating persistent inequalities.

Juan C. Palomino, Gustavo A. Marrero, Brian Nolan, Juan Gabriel Rodríguez, 09 February 2022

Wealth inequality can limit people’s ability to accumulate human capital, carry out business projects, or cope with major economic crises. Focusing on France, Spain, the UK, and the US, this column shows that intergenerational transfers, such as inheritances and inter vivos gifts, play a significant role in underpinning wealth inequality. When inheritances and gifts exceed a certain threshold, the opportunities to accumulate more wealth are greatly expanded.

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