A new study by the Max Planck Institute for Demographic Research, the University of Cologne, GESIS and the Norwegian Institute of Public Health has analysed how the financial wealth of individuals changes depending on different family generation changes. It was found that people who become parents and grandparents late and also lose their parents late can increase their wealth the most, while four-generation families have the lowest growth in wealth. A person’s financial wealth depends on the interplay of several family events and is always linked to the family as a whole.

Rostock, October 23th, 2024 – Hardly any other characteristic defines a person’s social status as strongly as wealth. Wealth is a key indicator of social inequality and facilitates access to education, healthcare and professional success. In a study, researchers from the Max Planck Institute for Demographic Research, the University of Cologne, GESIS and the Norwegian Institute of Public Health have analysed how financial wealth changes depending on different generational changes within families, i.e. the birth of grandchildren or the death of parents. Data from Norwegian register databases were analysed. People born in 1953 were analysed.



Investigating changes in wealth in the family context

The researchers investigated how people’s wealth changes in connection with certain family events and the time at which these events take place. The events considered are the death of parents, the start of parenthood or childlessness and the start of grandparenthood. ‘The aim of the study is to describe how the interplay of various cross-generational family events is linked to a person’s wealth accumulation over the course of their life,’ explains Bettina Hünteler from the MPIDR.



Interaction of various family events is decisive

The results of the study show that people who lose their second parent late (60 years) and become parents themselves late (28 years) and grandparents (60 years) can increase their wealth the most. Childless people start at the bottom of the ranking (measured from the age of 40). However, in the long term, they overtake people who became parents (23 years) and grandparents (50 years) at an early age, especially if people without children experience the death of their parents late. The clusters of early parenthood and grandparenthood are the only ones in which wealth declines in the long term compared to the other family patterns. The timing of the loss of parents also always plays a major role. A later death of the second parent (from their mid-50s) is associated with higher wealth, regardless of when and whether people become (grand)parents.

In terms of the generational structure as a whole, four-generation families fare the worst. This is where the smallest increases in wealth or even decreases in wealth occur compared to other generational structures. The comparatively largest increases in wealth are recorded among those without children, especially in connection with the late death of parents. Three-generation families with late family events have the highest and most stable wealth position over the entire observation period.

Bettina Hünteler and her colleagues come to the following conclusion: ‘A person’s financial wealth depends on the interplay of several family events. In addition, individual wealth is always linked to the family as a whole. This means that wealth always depends on the number of living relatives and how it is distributed within the family and between generations,’ says Hünteler.

Original publication:

Bettina Hünteler, Theresa Nutz, Jonathan Wörn: The relationship of intergenerational family transitions and wealth in Norway: A life course perspective in Oxford University Press (2024). DOI: 10.1093/sf/soae151

Further Information:

(https://www.demogr.mpg.de/de/news_events_6123/news_pressemitteilungen_4630/presse/die_familie_als_vermoegensfaktor_13591)

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