[HN Gopher] Intergenerational mobility over six centuries (2016)
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Intergenerational mobility over six centuries (2016)
Author : agomez314
Score : 32 points
Date : 2021-07-27 15:03 UTC (7 hours ago)
(HTM) web link (voxeu.org)
(TXT) w3m dump (voxeu.org)
| PragmaticPulp wrote:
| Interesting study, but the effects on earnings weren't as extreme
| as the headline led me to believe:
|
| > Stated differently, being the descendants of the Bernardi
| family (at the 90th percentile of earnings distribution in 1427)
| instead of the Grasso family (10th percentile of the same
| distribution) would entail a 5% increase in earnings among
| current taxpayers (after adjusting for age and gender).
|
| A 5% difference in earnings between descendants of a 90th
| percentile family and a 10th percentile family may be
| statistically significant, but it's still only 5%. A 5%
| difference in earnings isn't going to move someone from lower
| class to upper-middle class lifestyle.
|
| The authors found that some of this effect was due to certain
| families that tended toward elite professions like doctors and
| lawyers. I suppose we could make an argument for eliminating
| legacy preference in university admissions, but I'm sure some
| families would still bias toward certain professions in the
| interest of following in their parents' footsteps.
| raxxorrax wrote:
| On the contrary I believe. If you really factor in social
| momentum a name and association with the city can carry, it may
| be neutral. Perhaps some intelligence in inheritable and you
| got your answer.
|
| But even over such long times wealth can be transfered. Don't
| know how many can trace back their lineage to the Medici, but
| it is entirely possible even with devastating wars rolling the
| dices anew.
| thescriptkiddie wrote:
| It's worth pointing out that there is a huge difference between
| the 90th percentile and the 95th percentile, and an even bigger
| difference between the 95th and the 99th. This is doubly true
| if you look at wealth rather than income.
| annual income [0] ================= 1st: $0
| 5th: $10k 10th: $16k 50th: $68k 90th: $200k
| 95th: $270k 99th: $531k net worth [1]
| ============= 1st: -$95k 5th: -$18k 10th:
| $0 50th: $121k 90th: $1.2m 95th: $2.6m
| 99th: $11m
|
| [0] https://dqydj.com/average-median-top-household-income-
| percen... [1] https://dqydj.com/average-median-top-net-worth-
| percentiles/
| [deleted]
| jvanderbot wrote:
| If I'm reading that right, that's a 5% _earnings_ boost, not a
| 5% _wealth_ boost.
|
| Reasonable wealth appreciation on a 5% "bonus" check / year is
| an incredible amount of wealth.
|
| Just for reference, investing 1 <currency>/year for 60 years at
| 6% returns is 533 <currencies>. A 5% boost might be an extra
| 10,000 USD for a high earner (like a 90th percentile earner).
| That's 5,330,000 USD earned in a lifetime just from investing
| that family name bonus. That kind of money would buy your
| grand-kids a nice college education.
|
| That wealth has probably enabled a lot, including the increased
| opportunities that gives every single one of their descendants
| a 5% boost in income.
| jvanderbot wrote:
| So, where am I wrong?
| lumost wrote:
| The above math indicates that one generation with this 5%
| income boost gains enough wealth to move them up the wealth
| ladder. If this appreciation goes on for 6 _Centuries_ then
| it amounts to wealth that makes working entirely optional.
|
| It also suggests that looking at wages is a misleading
| statistic, as wages do not typically make up the majority
| of money that a wealthy individual would gain in a given
| year.
| exporectomy wrote:
| > I suppose we could make an argument for eliminating legacy
| preference in university admissions, but I'm sure some families
| would still bias toward certain professions in the interest of
| following in their parents' footsteps.
|
| Why would we want to do anything to change it? I'm having
| trouble expressing this idea so maybe it's not clear but you
| want to change who ends up wealthy from one random person to
| another random person? Whoever it is is still just human like
| the other one. It's already a complete lottery which family
| somebody will be born into. As long as you accept that some
| individuals will end up advantaged over others, why does it
| matter which ones they are? The result will still be "high
| income earners earn higher income than low income earners".
| zeku wrote:
| I think that instead of framing it as fairness--which seems
| to agitate those who were born with monetary advantages, this
| conversation should be re-framed to focus on societal
| efficiency.
|
| It is inefficient to shoehorn people to the top because their
| parents were at the top. The people at the top should be our
| highest achievers and not our decent achievers who were born
| with rich parents.
|
| The way our society is structured we will find ourselves much
| better off in a few generations if we can devise a system
| where each persons potential is given a proper environment to
| flourish and where each high potential person is given a
| carrot to chase that isn't unachievable.
|
| Edit:
|
| Speaking of carrots to chase. It's looking more and more like
| the wealth of millennials(and I suppose zoomers?) long term
| will be very very determined by their inheritance(if they are
| so lucky to have one lol) and less so by their hard work in
| life.
|
| This is likely the cause of the number of people under 40 who
| seem to be "opting out". It's very difficult to get to the
| supposed goal unless you are a high achiever. The carrot is
| very much too far away and this is another societal
| inefficiency. We would have a much more dedicated workforce
| if we made it possible to get "carrots".
| majormajor wrote:
| Beyond that, if you just put it down to pure randomness you
| end up killing the incentive to try to advance your
| situation by playing by the rules.
|
| If the people at the top try to just promote defeatism to
| talk people out of challenging their place, they risk
| something quite different: if you believe putting more
| effort towards playing the game won't change your
| situation, you start looking at alternatives like crime or
| revolution. The random people who were born rich don't
| deserve it any more than you, so let's replace them with
| us. A system that isn't based on violence or the threat of
| violence can only work if people believe it actually does
| give them opportunity.
| zeku wrote:
| I agree. Long term it is advantageous for everyone if our
| society is more fair, because if you keep pushing the
| lower class down a little further each generation
| eventually they will indeed have enough of it.
| Jiro wrote:
| To state the obvious, this is entirely consistent with the
| hypothesis that people earn more because they inherited something
| from their parents, but that what they inherited is cultural or
| genetic, rather than their parents' money.
|
| I wouldn't be surprised if white supremacists started using
| studies like these to "prove" that since Jews stayed wealthy over
| multiple generations, they must be conspiring to cheat the
| gentiles.
| exporectomy wrote:
| It's destructive to speculate on what your ideological enemies
| might be thinking so you have an imaginary reason to hate them.
| It's a kind of mental masturbation. Find a real thing real
| people did and complain to them about that thing.
| rafaelero wrote:
| This agrees with the finding that genetics is the mechanism
| through which income is transmited.[1]
|
| [1]https://link.springer.com/article/10.1007/s10888-019-09413-x
| pope_meat wrote:
| You just not working hard enough, otherwise your dad would have
| left you an inheritance, or at the very minimum given you
| access to his professional network of other hard working dad's
| who's dad's left them inheritances.
| rafaelero wrote:
| It's not about wealth, but ability to generate income.
| dang wrote:
| Past related threads:
|
| _The richest families in Florence in 1427 are still the richest
| (2016)_ - https://news.ycombinator.com/item?id=18872376 - Jan
| 2019 (255 comments)
|
| _The richest families in Florence in 1427 are still the richest
| (2016)_ - https://news.ycombinator.com/item?id=13555925 - Feb
| 2017 (89 comments)
|
| _Today 's rich families in Florence were rich 700 years ago_ -
| https://news.ycombinator.com/item?id=11731890 - May 2016 (103
| comments)
| [deleted]
| agomez314 wrote:
| > Societies characterised by a high transmission of socioeconomic
| status across generations are not only more likely to be
| perceived as 'unfair', they may also be less efficient as they
| waste the skills of those coming from disadvantaged backgrounds.
| Existing evidence suggests that the related earnings advantages
| disappear after several generations. This column challenges this
| view by comparing tax records for family dynasties (identified by
| surname) in Florence, Italy in 1427 and 2011. The top earners
| among the current taxpayers were found to have already been at
| the top of the socioeconomic ladder six centuries ago. This
| persistence is identified despite the huge political,
| demographic, and economic upheavals that occurred between the two
| dates.
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