It’s easy to look at the child of a celebrity or power couple and see the leg up their family’s wealth, power, and connections got them in their own separate venture or company. And it’s even easier to label them a nepo baby when they benefit from their parent’s money and clout. But the nepo baby trend may extend beyond Hollywood, touching the lives of everyday Americans.
In other words, it’s increasingly obvious that who your parents are has become a more reliable predictor of your wealth than what you actually do for a living.
According to a new working paper from the National Bureau of Economic Research, there’s a growing rift between income and wealth generation. For decades, the American Dream was predicated on the fact that hard work and a decent income would lead to homeownership. But the research finds that high earnings no longer correlate directly with wealth generation. Rather, it matters more so today what assets your family owns.
“Those that come from wealthier families that are maybe able to achieve those other economic goals—wealth building, homeownership—I think also could play into a sentiment of a sort of unfairness in the economy,” Max Risch, one of the study’s co-authors and an assistant professor at Carnegie Mellon University, told Fortune.
