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Link Between Rich Parents and Rich Children

Question

Analyse why the children of the rich tend to become rich adults.

Category:

Labor Market and Income Distribution

CIE O Level June 2021

Preview Answer

Children of the rich tend to become rich adults. There are several reasons why this may be the case:

(1) 💰Children of the rich can afford to study in the best schools and colleges.

The children of rich families tend to go to better quality schools, have higher cognitive skills, and complete more years of schooling. Attending a high-quality school may have direct long-run effects on an individual’s lifetime earnings by creating a more valuable professional network. They will be more productive and efficient, thus earning higher income.

(2) 💰 Rich parents may have connections with bosses of major employers, thus their children are more likely to gain high paid work.

Rich parents have more time and resources to invest in their children, which can enable children to be more prepared for school and work, which leads to higher earnings.

(3) 💰 Rich children may not need to worry about taking part time jobs or supporting their families while studying at university. Thus they can concentrate on getting high quality education without any distractions.

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