Intergenerational disadvantage: Learning about equal opportunity from social assistance receipt

Abstract

We use variation in the intergenerational persistence across social assistance benefits over 18 years to study the drivers of intergenerational disadvantage. Young people are more likely to receive social assistance if their parents received disability, caring, or single parent benefits, and less likely if they received unemployment benefits. Disparity in intergenerational persistence across benefit types suggests that parental bad luck has broader consequences for youth disadvantage than do their personal choices. Using the intensive margin and timing of parental social assistance to account for unobserved heterogeneity indicates that intergenerational disadvantage is more likely driven by poverty traps than welfare cultures.