The multiple mediators of early differences in academic abilities by parental financial resources in Germany

This paper examines the mediators of differences in academic abilities by parental income and wealth among pre-schoolers in Germany. Families' investment, parental stress and parenting, neighbourhood effects, and parents' educational norms and aspirations are considered as mediators. Unlike most existing studies, we explicitly consider the interdependence of these mediators and, therefore, apply sequential joint mediation analysis. We find that children in income-poor households score up to 0.34 standard deviations lower and children in households with a negative net worth up to 0.24 standard deviations lower in tests of academic ability, even when controlling for a comprehensive set of other familial characteristics. All mediators together explain on average 47% of the differences by income, but only 17% of the wealth differences. Parental investment is the most important mediator, followed by neighbourhood effects. Parental Stress, mother-child interaction quality, and educational norms and aspirations seem to be less relevant as mediators.