The Analysis Of Intergenerational Income Mobility Of Chinese Residents

From the perspective of intergenerational income mobility，this paper studies theopportunity fairness for Chinese residents to earn the income.Using the large sampledatasets of “China Health and Retirement Longitudinal Study(CHARLS)-2008”conducted by National School of Development, Peking University,this paper analyses the intergenerational income mobility of Chinese residents and therelationship between education and intergenerational income mobility.By analyzing the income transition matrix and intergenerational income elasticitycoefficient,three characteristics of the intergenerational income mobility of Chineseresidents are concluded: First of all,the intergenerational income mobility of Chineseresidents is low and children’s economic status are greatly affected by their parents’;Then, the intergenerational income mobility in the bottom and top income quintile islimited while it is quite mobile in the middle; Finally,the intergenerational incomemobility of rural residents is lower than that of urban residents.Exploring the relationship between education and intergenerational incomemobility,we find that education plays a very important role in increasingintergenerational income mobility of Chinese residents. Intergenerational incomeelasticity coefficient of higher education group is lower than that of non-highereducation group, which indicates that education is beneficial to improveintergenerational income mobility. On the basis of binary logistic regressionmodel,we find that the more education that children get,the easier for them to enterthe top income class, especially for children from top income quintilefamilies.Therefore,a conclusion can be basically made: education is not onlybeneficial for higher income class to transfer their economic status, but also veryconducive for the lower class, especially for the bottom class to get rid of theirdisadvantages. However, the former function of education is slightly higher than thelatter.Therefore, the government should take efforts to increase education investment.In addition to guaranteeing the growth of education resources,more attention shouldbe paid to balancing the various education resources to eliminate the educationinequality. Furthermore, more education resources should be distributed to poorfamilies in rural and backward areas, which will give full play to the role ofeducation in promoting intergenerational income mobility and social justice. At the meantime, it will be helpful to avoid "middle-income trap" and maintain thesustainable development of society.This paper also explores the specific channels that education takes to affectintergenerational income mobility. We find that apart from the human capital,education can also influence the intergenerational income mobility of Chineseresidents through hukou, social capital, occupational status and assortative mating.First of all, through their own efforts, a small part of rural-born children leap intohigh income class by obtaining higher education and urban hukou, which greatlyimproves the current intergenerational income mobility of urban residents and makesthe urban intergenerational mobility far higher than the rural. Then, education ishelpful to eliminate the labor market segmentation, which reduces the effects thatparents have on their children’s occupational status. In this way,education is able topromote the intergenerational income mobility. In addition, education is able toimprove intergenerational income mobility by increasing the advantages inindividual’s social capital and assortative mating.