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Wealth of Children from Single-Parent Families: Low Levels and High Inequality in Germany

Aufsätze referiert extern - Web of Science

Philipp M. Lersch, Markus M. Grabka, Kilian Rüß, Carsten Schröder

In: Journal of European Social Policy 31 (2021), 5, S. 565–579


Families’ economic wealth is a resource that can provide children with crucial advantages early in their lives. Prior research identified substantial variation of wealth levels between different family types with children from single-parent families being most disadvantaged. The causes of this disadvantage, how much the disadvantage varies between children and how the non-resident parents’ wealth may potentially reduce the disadvantage remain unclear. To address these research gaps, we use data from the German Socio-Economic Panel (2002–17) to examine the level of and inequality in wealth for children from single-parent families using recentred influence function regression and decomposition analysis. We replicate earlier findings of a large wealth disadvantage for children in single-parent families. We find that the wealth disadvantage can be mainly explained with compositional differences in household income and employment characteristics. Beyond level differences, inequality between children from single-parent families is higher than for other family types and this inequality can only partly be explained by observed demographic and socio-economic characteristics. When considering the wealth of non-resident parents, the wealth disadvantage of children in single-parent families is reduced but remains substantial.

Philipp Lersch

Senior Research Fellow in the German Socio-Economic Panel study Department

Carsten Schröder

Board of Directors SOEP and Division Head Applied Panel Analysis in the German Socio-Economic Panel study Department

Markus M. Grabka

Board of Directors SOEP & Acting Division Head Knowledge Transfer in the German Socio-Economic Panel study Department

JEL-Classification: D31;D1;J1
Keywords: wealth, family, children, inequality, separation