Do Parents Propagate Inequality Among Children? Evidence From Chinese and Swedish Twins

ABSTRACT Economists have long studied how parental behavior shapes within‐family inequality, yet empirical findings remain mixed. Using twins data from China and Sweden, we examine the predominant mechanisms reported in the literature. Parents in both countries invest similarly during childhood. Inter vivos transfers, however, differ: Chinese parents reinforce income inequality, whereas Swedish parents distribute wealth equally; the reinforcing pattern reflects exchange motives. Bequests are divided equally in both countries. Parental education plays a key role: less educated parents reinforce income inequality, whereas more educated parents transfer wealth equally. Cross‐country differences in parental education may thus help explain the mixed findings.