“Future-orientedness,” defined as a collection of personality traits that influence variations in savings behavior across households, is a key determinant of wealth accumulation.
Summary
Research has shown that wealth inequality can persist across generations, with wealthy parents often having wealthy children. The mechanisms behind the transmission of wealth are complex, however, involving both financial and nonfinancial factors. This study advances our understanding of wealth inequality by exploring how the future-orientedness of married people in the 1970s helps to explain wealth inequality among their adult children and grandchildren today.
Key Insights
- Projected wealth is linked to the future-orientedness of grandparents, and this link operates through correlations with parental characteristics and parent-child practices.
- Children from future-oriented families are more likely to participate in activities associated with higher future income.
- Children of parents with higher future-orientedness not only save more but are also less likely to marry as teenagers, have children before age 21, and get divorced.
