Education, Social Origin, and Wealth
How wealth is related to other socioeconomic characteristics such as education and social background is an important topic for various reasons. First of all, it gives us hints about how wealth is obtained. Education is an important determinant of earnings in the labor market and therefore determines the possibilities to accumulate wealth from savings. Social background, on the other hand, refers to the socioeconomic status of the family a person grew up in. Persons with a high socioeconomic background are more likely to receive financial support from their parents than persons from poorer backgrounds. Inheriting is one of the most common ways through which people become wealthy. In other words, how education and social background relate to wealth can give a first insight into the possible importance of different ways of becoming wealthy.
A second reason to look at the relationship between social background, education, and wealth is that the former two are commonly used markers of general socioeconomic advantage. As compared to income, education and social background are often believed to better capture advantages that go beyond money such as social and cultural capital, norms, and lifestyles. If wealth is strongly related to education and social background, wealth will be a factor strengthening social cleavages along these socioeconomic lines.
The left pane of Figure 1 shows how education is related to household wealth across the period studied here. Individuals who went to university live in wealthier households than individuals with lower levels of education. Differences between the different levels of non-university education are relatively minor. The gap between individuals with university education and the rest increased considerably between 2002 and 2014. Whereas in 2002 the wealth of university-educated persons was almost double that of those who finished lower secondary education (ESO), it was almost three times as high by 2014. At the same time, not all news is bad as the median level of wealth of households with non-university education is still roughly between 100.000 and 150.000 euros depending on the year and specific category considered. From an international perspective, this is quite high.
Figure 1. Household wealth and income according to educational level
Note. Educational level of individuals aged 30 or more who are either head of household or partner of the head of household.
The right pane of Figure 1 compares the relationship between wealth and education to the relationship between income and education. Two observations stand out. Income seems more clearly stratified by education than wealth, especially in 2002. Therefore, wealth might have weakened some of the educational cleavages in terms of economic resources in the past. However, in recent years, wealth has started to look more like income in terms of its relationship to education, implying that wealth likely accentuates educational differences in economic resources today.
Figure 2 displays the relationship between social background and wealth. Social background was measured by asking respondents about the occupation of their father during their adolescence. These occupations can be divided into three broad social classes. Service class occupations are managers, professionals, and high-level occupations with high degrees of autonomy, status, or power. Working-class occupations primarily refer to occupations for which relatively little training or skills are needed and with low levels of autonomy, status, and power. Intermediate occupations fall in between. The social class of parents can be regarded as a rough indication of the resources that parents possess(ed) and possibly transferred to their children.
The trends for social background are relatively similar to those observed for education, but differences between groups increased much less dramatically in the case of social background. In a way, this might be a surprising finding because the main route towards wealth accumulation is buying a house, and buying a house has become increasingly difficult for young people without financial help from their parents in Spain. The consequences of that development might possibly only become visible in the future.
Figure 2. Household wealth and income according to social background
Note. Father's class of individuals who are either head of household or partner of the head of household and are aged 29 or more.
Discover more about wealth, its distribution across Spanish households, and the characteristics of individuals living in households with little and plenty of wealth by clicking on one of the buttons below.
A gentle introduction to the concept of wealth
FAQ: What is wealth and is wealth inequality important?
Basic trends in household wealth and its distribution in Spain
Who is gaining wealth, who is falling behind?
Income Education and Social Background
This project is financed by the “la Caixa” Social Research Call 2019 (SR0403-WINEQ)
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