Nepo babies are taking over the workplace.

Nepo means nepotism - according to kinship.

"ONE OF THE peculiar things about income is how easily it is passed on from one generation to the next. 

Nearly four-in-ten American children born to parents in the top fifth of the income distribution remain in the top fifth as adults. 

One reason that earnings tend to persist across generations is that high-income parents pass along valuable attributes via their genes. They also tend to invest more in their children's education, boosting their earnings potential in the labour market. Family connections matter, too. The offspring of celebrities who work in the same industries have been branded "nepo babies". But the phenomenon stretches far beyond Hollywood. New research shows how widespread?and lucrative such links are.

A paper by Matthew Staiger, an economist at Opportunity Insights, a research group at Harvard University, suggests that people who find a job through a parent either at a small family-run business or a Fortune 500 company enjoy a significant boost in earnings. 

Using data from America's Census Bureau, Mr Staiger analysed the job histories of 32m people who graduated from high school between 2000 and 2013. He found that, although just 5% of people work for a parent's employer at their first job, by the age of 30 29% have worked with their father or mother at one time or another. Such stints apparently pay off. Mr Staiger estimates that those who work at a parent's employer earn 19% more than those who don't in their first job largely because they gain access to higher-paying industries and firms.

When Mr Staiger looked at who takes advantage of such family connections, he found that it is disproportionately those from families that are already well-off. 

Just 2% of children with parents at the bottom percentile of the income distribution work for a parent's employer, compared with 7% of children with parents at the top percentile. Children from affluent families also benefit much more from such connections than those from poorer backgrounds. Mr Staiger found that working with a parent in the bottom fifth of the income distribution does not significantly affect earnings, whereas working with a parent in the top fifth boosts earnings by 20%. White children, especially white sons, exploit parental connections more often than black ones, even after controlling for income; Hispanic children do so at even higher rates.

America is said to be the land of opportunity. But when it comes to jobs with mum and dad, the opportunities are mainly for those at the top.” [1]

·  ·  ·1.   "Nepo babies are taking over the workplace." The Economist, 16 Feb. 2023, p. NA.