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Jani Erola and Elina Kilpi-Jakonen

The aim of this volume is to advance the theoretical and empirical case for compensation as a general mechanism influencing intergenerational social inequality. The volume brings together research on different aspects and types of compensation and covers a number of countries representing different kinds of institutional configurations. This chapter introduces the theoretical basis for compensation and discusses how the study of compensation may give further insights into general processes of intergenerational social inequality. The authors contrast compensation with other mechanisms of resource transfer, namely straightforward accumulation and the multiplication of advantages. They then go further into the different types of compensation and illustrate the kinds of cases in which compensatory processes should be at work. They also discuss how institutions are expected to influence compensation. Finally, they summarize the findings of the empirical chapters that follow and evaluate the extent to which the findings give support for a general theory of compensation, and what the implications are for policy and future research.

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Hannu Lehti and Jani Erola

Extended family members may provide resources for children for reasons ranging from evolutionary processes to social norms regarding intergenerational solidarity. In order to gain a better understanding of the interpersonal compensation effect, this chapter examines whether aunts and uncles compensate for low parental education, leading to children’s higher educational attainment, and what the possible mechanisms behind this process are. The authors study differences in the extended family compensation of father’s and mother’s education and compare whether that differs according to paternal and maternal lineages. They use the Finnish census panel and administrative data. The results show that children who have low educated parents benefit from having highly educated aunts or uncles. The accumulation of human capital within the extended family network seems to be the most plausible explanation behind the interpersonal compensation. Further, the family members from the maternal lineage are more important in compensating for low resources, supporting the evolutionary explanation behind the effect.

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Social Inequality Across the Generations

The Role of Compensation and Multiplication in Resource Accumulation

Edited by Jani Erola and Elina Kilpi-Jakonen

Social Inequality Across the Generations provides an innovative perspective on social stratification studies by advancing the theoretical and empirical case for the influence of resource compensation. It examines whether resource compensation is a successful mechanism for social mobility, contrasting it against competing types of resource accumulation such as multiplication. This book is the first to cover extensively the role of compensation in intergenerational attainment – a new and rapidly spreading concept in stratification research.
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Aleksi Karhula, Jani Erola and Elina Kilpi-Jakonen

The Finnish day care system is considered to be one of the most universalistic in the world. Day care is heavily subsidized by the state and completely free for low-income families. Yet compared to other Nordic countries a substantially higher number, 40 per cent of children aged one to five, are taken care of at home. In this chapter we show that day care is positively associated with later educational outcomes in the Finnish context. Half or more of this advantage is explained by the positive selection into day care of children with highly educated parents. Further analysis indicates that the remaining association is either due to selection on other family background factors, or is mediated by lower family income and weaker labour market ties of the parents. Although some previous studies have found heterogeneous effects, we find them to be similar for all levels of parental education.