Intergenerational Income Mobility in Urban China
Cathy Honge Gong, Andrew Leigh, Xin Meng
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 parentsí 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.
Text: See Discussion Paper No. 4811