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Interesting study, but the effects on earnings weren’t as extreme as the headline led me to believe: > Stated differently, being the descendants of the Bernard

Interesting study, but the effects on earnings weren’t as extreme as the headline led me to believe: > Stated differently, being the descendants of the Bernardi family (at the 90th percentile of earnings distribution in 1427) instead of the Grasso family (10th percentile of the same distribution) would entail a 5% increase in earnings among current taxpayers (after adjusting for age and gender). A 5% difference in earnings between descendants of a 90th percentile family and a 10th percentile family may be statistically significant, but it’s still only 5%. A 5% difference in earnings isn’t going to move someone from lower class to upper-middle class lifestyle. The authors found that some of this effect was due to certain families that tended toward elite professions like doctors and lawyers. I suppose we could make an argument for eliminating legacy preference in university admissions, but I’m sure some families would still bias toward certain professions in the interest of following in their parents’ footsteps.

raxxorrax 5y ago
On the contrary I believe. If you really factor in social momentum a name and association with the city can carry, it may be neutral. Perhaps some intelligence in inheritable and you got your answer. But even over such long times wealth can be transfered. Don't know how many can trace back their lineage to the Medici, but it is entirely possible even with devastating wars rolling the dices anew.
jvanderbot 5y ago
If I'm reading that right, that's a 5% earnings boost, not a 5% wealth boost. Reasonable wealth appreciation on a 5% "bonus" check / year is an incredible amount of wealth. Just for reference, investing 1 <currency>/year for 60 years at 6% returns is 533 <currencies>. A 5% boost might be an extra 10,000 USD for a high earner (like a 90th percentile earner). That's 5,330,000 USD earned in a lifetime just from investing that family name bonus. That kind of money would buy your grand-kids a nice college education. That wealth has probably enabled a lot, including the increased opportunities that gives every single one of their descendants a 5% boost in income.
- jvanderbot 5y ago
  So, where am I wrong?
  - lumost 5y ago
    The above math indicates that one generation with this 5% income boost gains enough wealth to move them up the wealth ladder. If this appreciation goes on for 6 Centuries then it amounts to wealth that makes working entirely optional. It also suggests that looking at wages is a misleading statistic, as wages do not typically make up the majority of money that a wealthy individual would gain in a given year.
exporectomy 5y ago
> I suppose we could make an argument for eliminating legacy preference in university admissions, but I’m sure some families would still bias toward certain professions in the interest of following in their parents’ footsteps. Why would we want to do anything to change it? I'm having trouble expressing this idea so maybe it's not clear but you want to change who ends up wealthy from one random person to another random person? Whoever it is is still just human like the other one. It's already a complete lottery which family somebody will be born into. As long as you accept that some individuals will end up advantaged over others, why does it matter which ones they are? The result will still be "high income earners earn higher income than low income earners".
- zeku 5y ago
  I think that instead of framing it as fairness--which seems to agitate those who were born with monetary advantages, this conversation should be re-framed to focus on societal efficiency. It is inefficient to shoehorn people to the top because their parents were at the top. The people at the top should be our highest achievers and not our decent achievers who were born with rich parents. The way our society is structured we will find ourselves much better off in a few generations if we can devise a system where each persons potential is given a proper environment to flourish and where each high potential person is given a carrot to chase that isn't unachievable. Edit: Speaking of carrots to chase. It's looking more and more like the wealth of millennials(and I suppose zoomers?) long term will be very very determined by their inheritance(if they are so lucky to have one lol) and less so by their hard work in life. This is likely the cause of the number of people under 40 who seem to be "opting out". It's very difficult to get to the supposed goal unless you are a high achiever. The carrot is very much too far away and this is another societal inefficiency. We would have a much more dedicated workforce if we made it possible to get "carrots".
  - majormajor 5y ago
    Beyond that, if you just put it down to pure randomness you end up killing the incentive to try to advance your situation by playing by the rules. If the people at the top try to just promote defeatism to talk people out of challenging their place, they risk something quite different: if you believe putting more effort towards playing the game won't change your situation, you start looking at alternatives like crime or revolution. The random people who were born rich don't deserve it any more than you, so let's replace them with us. A system that isn't based on violence or the threat of violence can only work if people believe it actually does give them opportunity.
thescriptkiddie 5y ago
It's worth pointing out that there is a huge difference between the 90th percentile and the 95th percentile, and an even bigger difference between the 95th and the 99th. This is doubly true if you look at wealth rather than income. annual income [0] ================= 1st: $0 5th: $10k 10th: $16k 50th: $68k 90th: $200k 95th: $270k 99th: $531k net worth [1] ============= 1st: -$95k 5th: -$18k 10th: $0 50th: $121k 90th: $1.2m 95th: $2.6m 99th: $11m [0] https://dqydj.com/average-median-top-household-income-percentiles/ https://dqydj.com/average-median-top-household-income-percen... [1] https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/
deleted 5y ago
[deleted]

raxxorrax 5y ago

On the contrary I believe. If you really factor in social momentum a name and association with the city can carry, it may be neutral. Perhaps some intelligence in inheritable and you got your answer. But even over such long times wealth can be transfered. Don't know how many can trace back their lineage to the Medici, but it is entirely possible even with devastating wars rolling the dices anew.

jvanderbot 5y ago

If I'm reading that right, that's a 5% earnings boost, not a 5% wealth boost. Reasonable wealth appreciation on a 5% "bonus" check / year is an incredible amount of wealth. Just for reference, investing 1 <currency>/year for 60 years at 6% returns is 533 <currencies>. A 5% boost might be an extra 10,000 USD for a high earner (like a 90th percentile earner). That's 5,330,000 USD earned in a lifetime just from investing that family name bonus. That kind of money would buy your grand-kids a nice college education. That wealth has probably enabled a lot, including the increased opportunities that gives every single one of their descendants a 5% boost in income.

jvanderbot 5y ago
So, where am I wrong?
- lumost 5y ago
  The above math indicates that one generation with this 5% income boost gains enough wealth to move them up the wealth ladder. If this appreciation goes on for 6 Centuries then it amounts to wealth that makes working entirely optional. It also suggests that looking at wages is a misleading statistic, as wages do not typically make up the majority of money that a wealthy individual would gain in a given year.

exporectomy 5y ago

> I suppose we could make an argument for eliminating legacy preference in university admissions, but I’m sure some families would still bias toward certain professions in the interest of following in their parents’ footsteps. Why would we want to do anything to change it? I'm having trouble expressing this idea so maybe it's not clear but you want to change who ends up wealthy from one random person to another random person? Whoever it is is still just human like the other one. It's already a complete lottery which family somebody will be born into. As long as you accept that some individuals will end up advantaged over others, why does it matter which ones they are? The result will still be "high income earners earn higher income than low income earners".

zeku 5y ago
I think that instead of framing it as fairness--which seems to agitate those who were born with monetary advantages, this conversation should be re-framed to focus on societal efficiency. It is inefficient to shoehorn people to the top because their parents were at the top. The people at the top should be our highest achievers and not our decent achievers who were born with rich parents. The way our society is structured we will find ourselves much better off in a few generations if we can devise a system where each persons potential is given a proper environment to flourish and where each high potential person is given a carrot to chase that isn't unachievable. Edit: Speaking of carrots to chase. It's looking more and more like the wealth of millennials(and I suppose zoomers?) long term will be very very determined by their inheritance(if they are so lucky to have one lol) and less so by their hard work in life. This is likely the cause of the number of people under 40 who seem to be "opting out". It's very difficult to get to the supposed goal unless you are a high achiever. The carrot is very much too far away and this is another societal inefficiency. We would have a much more dedicated workforce if we made it possible to get "carrots".
- majormajor 5y ago
  Beyond that, if you just put it down to pure randomness you end up killing the incentive to try to advance your situation by playing by the rules. If the people at the top try to just promote defeatism to talk people out of challenging their place, they risk something quite different: if you believe putting more effort towards playing the game won't change your situation, you start looking at alternatives like crime or revolution. The random people who were born rich don't deserve it any more than you, so let's replace them with us. A system that isn't based on violence or the threat of violence can only work if people believe it actually does give them opportunity.

thescriptkiddie 5y ago

It's worth pointing out that there is a huge difference between the 90th percentile and the 95th percentile, and an even bigger difference between the 95th and the 99th. This is doubly true if you look at wealth rather than income. annual income [0] ================= 1st: $0 5th: $10k 10th: $16k 50th: $68k 90th: $200k 95th: $270k 99th: $531k net worth [1] ============= 1st: -$95k 5th: -$18k 10th: $0 50th: $121k 90th: $1.2m 95th: $2.6m 99th: $11m [0] https://dqydj.com/average-median-top-household-income-percentiles/ https://dqydj.com/average-median-top-household-income-percen... [1] https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/

deleted 5y ago

[deleted]