Persistence of inequality in Europe: the role of family economic conditions

In this article we analyse the intergenerational transmission of income inequality in 13 European countries on the basis of information provided by the European Union Statistics on Income and Living Conditions 2005 dataset. Improving on the literature dealing with the influence of family economic conditions on income earned in adult age by the offspring, we are able to estimate separately the effect operating through education and a direct economic effect. The latter, in some European countries, is of significant magnitude and seems to be related to the welfare regimes of the various countries. These findings highlight an additional characteristic of welfare regimes and allow a better understanding on how family conditions and institutions may interact in the process of inequality persistence across generations.