Standing on the shoulders of birth intergenerational mobility, inequality, and pro-social preferences

Poor outcomes arising from natural and social circumstances to which individuals are born, over which they have no control, are widely seen as normatively objectionable and potential obstacles for economic growth. Understanding the persistence and effects of circumstances of birth is crucial to abating these adverse effects, particularly in the context of rising global inequality. The existing literature is limited in two respects. Firstly, it lacks a comprehensive description of the persistence of intergenerationally transmitted preferences that contribute to the deterministic nature of accidents of birth. Secondly, the effects of dyadic and multigenerational (im)mobility on voluntary pro-social behaviour to mitigate the consequences of birth are rarely studied. This thesis fills these gaps in the South African context – a country with high and strongly racialised (a “natural” circumstance of birth) inequality, and comparatively low intergenerational mobility. Using a nationally representative dataset, significant correlations are observed in interracial trust attitudes between mothers and children. However, this effect is substantially smaller and largely insignificant for non-coresident mothers and children. Disaggregating the trust attitudes shows strong intergenerational correlations amongst individuals who completely mistrust their race and other race groups, irrespective of mother-child co-residence. In trust and public goods games with identical treatment designs, inherited socioeconomic status is assigned in two treatments based on real-world self-reported parental or grandparental socio-economic status. The results show weak overall effects on trust orientated behaviour in the trust game with socio-economic status inherited from parents or grandparents. However, there is substantial heterogeneity in behaviour with inherited social status in the trust game with trust and trustworthiness tending to favour individuals who inherit a low socio-economic status. Introducing inherited advantages for relatively higher endowment attainment in a public goods game shows increased contributions with parentally inherited status, but not from grandparents. Heterogeneous treatment effects show weak evidence of inequality aversion yet substantial altruistic preferences with parentally inherited advantages.

Grantor

School of Economics

Year dc:date.issued

2022

Author dc:creator

• Njozela,Lindokuhle

Advisor dc:contributor.advisor

• Burns, Justine

• economics

Handle dc:identifier.uri

http://hdl.handle.net/11427/37359

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/37359