Patrizio Piraino

Intergenerational Wealth Transmission and the Dynamics of Inequality in Small-Scale Societies

Origins of Egalitarianism Wealthy contemporary societies exhibit varying extents of economic inequality, with the Nordic countries being relatively egalitarian, whereas there is a much larger gap between top and bottom in the United States. Borgerhoff Mulder et al. (p. 682; see the Perspective by Acemoglu and Robinson) build a bare-bones model describing the intergenerational transmission of three different types of wealth—based on social networks, land and livestock, and physical and cognitive capacity—in four types of small-scale societies in which livelihoods depended primarily on hunting, herding, farming, or horticulture. Parameter estimates from a large-scale analysis of historical and ethnographic data were added to the model to reveal that the four types of societies display distinctive patterns of wealth transmission and that these patterns are associated with different extents of inequality. Some types of wealth are strongly inherited and, hence, contribute to long-term economic inequality. Small-scale human societies range from foraging bands with a strong egalitarian ethos to more economically stratified agrarian and pastoral societies. We explain this variation in inequality using a dynamic model in which a population’s long-run steady-state level of inequality depends on the extent to which its most important forms of wealth are transmitted within families across generations. We estimate the degree of intergenerational transmission of three different types of wealth (material, embodied, and relational), as well as the extent of wealth inequality in 21 historical and contemporary populations. We show that intergenerational transmission of wealth and wealth inequality are substantial among pastoral and small-scale agricultural societies (on a par with or even exceeding the most unequal modern industrial economies) but are limited among horticultural and foraging peoples (equivalent to the most egalitarian of modern industrial populations). Differences in the technology by which a people derive their livelihood and in the institutions and norms making up the economic system jointly contribute to this pattern.

The Intergenerational Transmission of Employers

We find that about 40% of a cohort of young Canadian men have been employed at some time with an employer for which their father also worked, and 6%–9% have the same employer in adulthood. The intergenerational transmission of employers is positively related to paternal earnings, particularly at the very top of the earnings distribution, and to the presence of self-employment income and the number of employers with which the father has had direct contact. It has an important influence on nonlinear patterns in the intergenerational elasticity of earnings.

Immigrant earnings growth: selection bias or real progress?: Immigrant earnings growth

We use longitudinal tax data linked to immigrant landing records to estimate the earnings growth of immigrants from three entering cohorts since the early 1980s. Selective attrition by low-earning immigrants might result in lower earnings growth with years since migration in longitudinal data compared to repeated cross-sections. Existing studies on U.S. data have found exactly this result (Lubotsky 2007, JPE). We ask whether a similar bias is observed in the Canadian data and find that it is not. We show that while low-earnings immigrants are more likely to leave the cross-sectional samples over time, the same is true for the Canadian born population. We conclude that there is no evidence of selective labour force participation patterns among immigrants in Canada compared to the native born population.

The effect of non-personnel resources on educational outcomes: Evidence from South Africa

Little credible evidence exists on the effect of nonpersonnel school expenditures on educational outcomes in developing countries. This paper studies the impact of nonpersonnel funding on school outcomes exploiting the peculiar way in which these resources are allocated in South Africa. Government funding follows quintiles constructed on the basis of school poverty scores. This creates discrete jumps in the allocation of funding, and we use a regression discontinuity approach to analyze its effects on school outcomes at the end of high school. Our results show a small but positive effect of resources on student throughput during the last years of high school and on the number of students writing the matriculation exam. However, additional resources do not translate into a higher number of successful exams, leading to an overall negative effect on pass rates. We suggest that these findings may have to do with schools reacting to the per-pupil nature of funding.

The Inheritance of Employers and Nonlinearities in Intergenerational Earnings Mobility

A growing literature addressing the intergenerational transmission of earnings often forms the backdrop for policy discussions dealing with equality of opportunity. This literature is generally framed in the context of a linear regression to the mean model, and motivated theoretically by models of parental investments in the human capital of their children as in Becker and Tomes (1986, 1979) and Loury (1981). The major concern of the empirical research has been the challenge of correctly estimating the elasticity of earnings between parents and their children in the presence of measurement errors and life cycle biases. Atkinson, Maynard, and Trinder (1983), Solon (1992, 1989) and Zimmerman (1992) offer a starting point that has led to a large number of studies from a number of countries, surveyed by d’Addio (2007), Bjorklund and Jantti (2009), Black and Devereux (2011), Corak (2006), and Solon (2002, 1999). Bohlmark and Lindquist (2006), Grawe (2006), Haider and Solon (2006) and Nybom and Stuhler (2016) represent some recent methodological developments.