Influence of assets over dynasties in semi-arid India: Econometric analysis using micro level panel data

The study of the capital accumulation between generations is of critical interest for understanding the pathways out of poverty in rural India. This paper uses unique Village Dynamics in South Asia (VDSA) dataset spanning for 23 years and up to three generations covering 154 households in three rural villages of India to study this. Generalized method of moments was used to understand the influence of parents’ characteristics on children. Results indicate that education and non-land assets are critical indicators of between-generation capital accumulation. In contrast, land assets, after controlling for non-land assets, appear to be associated with more stagnant capital accumulation, wealth and income effects.