Intergenerational Income Mobility in Urban China

40 Pages Posted: 15 Mar 2010

See all articles by Cathy Honge Gong

Cathy Honge Gong

affiliation not provided to SSRN

Andrew Leigh

Australian House of Representatives Parliament House; Centre for Applied Macroeconomic Analysis, ANU; IZA

Xin Meng

Australian National University; IZA Institute of Labor Economics

Abstract

This paper estimates the intergenerational income elasticity for urban China, paying careful attention to the potential biases induced by income fluctuations and life cycle effects. Our preferred estimates are that the intergenerational income elasticities are 0.74 for father-son, 0.84 for father-daughter, 0.33 for mother-son, and 0.47 for mother-daughter. This suggests that while China has experienced rapid growth of absolute incomes, the relative position of children in the distribution is largely determined by their parents' incomes. Investigating possible causal channels, we find that parental education, occupation, and Communist Party membership all play important roles in transmitting economic status from parents to children.

Keywords: intergenerational mobility, transgenerational persistence, political party membership

JEL Classification: D10, D31

Suggested Citation

Gong, Cathy Honge and Leigh, Andrew and Meng, Xin, Intergenerational Income Mobility in Urban China. IZA Discussion Paper No. 4811, Available at SSRN: https://ssrn.com/abstract=1570429

Cathy Honge Gong (Contact Author)

affiliation not provided to SSRN

Andrew Leigh

Australian House of Representatives Parliament House ( email )

Canberra, 2600
Australia

Centre for Applied Macroeconomic Analysis, ANU ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

IZA ( email )

Xin Meng

Australian National University ( email )

Research School of Economics
College of Business and Economics
Canberra ACT 0200
Australia
+61 26249 3102 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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