Ricerc@Sapienza

This work analyses mechanisms behind the intergenerational transmission of inequality in Italy by exploiting the waves from 2000 to 2016 of the Bank of Italy’s Survey on Household Income and
Wealth. Using fathers’ education as a proxy of parental background, we show that 1-year increase in fathers’ education is associated with a 3.6% increase in children’s earnings. Contrary to the
widespread idea that the intergenerational transmission is only related to parents’ investment in their children’s education, large background-related advantages (+1.8% for each year of parental
education) persist when we control for children’s education and other observables related to their human capital. Moreover, background-related advantages remain large and statistically significant
(+1.1%) when we also control for children’s occupation. Furthermore, we find that our measure of intergenerational association has not declined.