N. Meltem Daysal’s working paper "The Intergenerational Transmission of Housing Wealth" featured by NBER
Wealth inequality has been persistently increasing in the last four decades. Emphasized in the publication of Capital in the Twenty-First Century by Thomas Piketty (2014), this fact has reignited academic and public interest in understanding why wealth is transmitted across generations.
Parent and child wealth could be positively correlated due to pre-determined correlated characteristics of parents and children, such as ability, that drive wealth accumulation for both groups (selection) or because parental wealth impacts the actions of parents that are important in children’s accumulation of wealth (causation). Understanding the relative importance of selection versus causation in the intergenerational correlation of wealth is important for crafting policies to support wealth accumulation across generations.
In the paper, titled “The Intergenerational Transmission of Housing Wealth” (Daysal et al. 2023), they use Danish population-level administrative data and leverage plausibly exogenous variation in housing wealth driven by home price changes in different areas to isolate the causal impact of parental housing wealth on children’s wealth in adulthood.
Their ability to study the effects of parental housing wealth changes occurring in distinct time periods of childhood is a particularly novel feature of our study. Specifically, they examine how parental housing wealth changes during early childhood (ages 0-5), middle childhood (ages 6-11), and teenage years (ages 12-17) impact children’s overall wealth, housing wealth, and non-housing wealth at ages 29-33.
You can read the whole working paper here