Fewer Siblings, More Wealth? Sibship Size and Wealth Attainment

Abstract

This study examines the association between sibship size and wealth in adulthood. The study draws on resource dilution theory and additionally discusses potentially wealth-enhancing consequences of having siblings. Data from the German Socio-Economic Panel Study (SOEP, N = 3502 individuals) are used to estimate multilevel regression models adjusted for concurrent parental wealth and other important confounders neglected in extant work. The main results of the current study show that additional siblings reduce wealth by about 38%. Parental wealth moderates the association so that sibship size is more negatively associated with filial wealth when parents are wealthier. Birth order position does not moderate the association between sibship size and wealth. The findings suggest that fertility in the family of origin has a systematic impact on wealth attainment and may contribute to population-level wealth inequalities independently from other socio-economic characteristics in families of origin such as parental wealth.

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Notes

  1. 1.

    The confluence model states that the average intellectual environment in a family is important for child development. Young children reduce the “intellectual average”, and therefore, larger sibship sizes have negative developmental consequences (especially for first-born children). At the same time, interaction between siblings and tutoring of younger siblings by older siblings may improve outcomes for older siblings (Härkönen 2014; Zajonc and Markus 1975).

  2. 2.

    Full, half, step and adopted siblings are all included, as resource dilution may occur through all these different types of siblings. A control variable for half and step siblings is included in multivariate models.

  3. 3.

    Respondents from booster samples added in 2012 and thereafter are dropped as they have not participated in the wealth module in 2012 or they provide too few cases where parents and children are observed in separate households.

  4. 4.

    The birth order index is constructed as follows: Birth order index = (Birth order position of individual/((Number of siblings + 1)/2)) − 1. For instance, an only child has the value 0.000 (= [1/1] − 1), the first-born child in a two-child family has the value − 0.333 (= [1/1.5] − 1), and the second-born child in a two-child family has the value 0.333 (= [2/1.5] − 1).

  5. 5.

    The question regarding risk preferences is: “Are you generally a person who is fully prepared to take risks or do you try to avoid taking risks?" with answer categories (11-point scale) from “risk averse” to “fully prepared to take risks”. This question has been fielded in 2004, 2006 and then annually since 2008 until 2016. The question regarding impulsiveness is: “Do you generally think things over for a long time before acting—in other words, are you not impulsive at all? Or do you generally act without thinking things over for long, in other words, are you very impulsive?” with answer categories (11-point scale) from “not at all impulsive” to “very impulsive”. The question has been fielded in 2008 and 2013.

  6. 6.

    It is assumed that these characteristics do not change after a childbirth.

  7. 7.

    Family fixed-effects models cannot be estimated as the sibship size is a family-level characteristic.

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Acknowledgements

The author thanks Marita Jacob, Reinhard Schunck, seminar participants at the University of Cologne and University of Duisburg-Essen and participants at the ECSR Workshop “Demography and Inequality” for helpful comments on an earlier version of the manuscript. All errors remain those of the author. The computer code for the empirical analysis is available at https://osf.io/s62ed/.

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Lersch, P.M. Fewer Siblings, More Wealth? Sibship Size and Wealth Attainment. Eur J Population 35, 959–986 (2019). https://doi.org/10.1007/s10680-018-09512-x

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Keywords

  • Siblings
  • Wealth
  • Family of origin
  • Resource dilution