By 2010 that number jumped to 2.66. Meanwhile, the reverse is true for women in the bottom 10% of wage earners who were having 3.38 kids on average in 1980 compared to 2.96 in 2010. The report from the St.Louis Federal Reserve concludes that as income rises it makes more sense for women to pay for childcare costs so that they can work longer hours. Working longer hours allows them to further increase their income and be able to financially afford to have more children.
The children of rich families tend to differ from their poorer peers in multiple ways. They have fewer siblings and more educated parents. Their parents spend more time with them and send them to better quality schools. Their cognitive skills are higher, and they complete more years of schooling. All of these channels have been found to affect an individual’s earnings. However, in order to design policies to improve intergenerational mobility, we need to understand how these channels interact with each other in generating correlations in lifetime income across generations.
