The Analysis Of Intergenerational Income Mobility Among Different Income Groups In Urban And Rural Areas

In the past 40 years of reform and opening up policy,with the fast-growing growth of Chinese economy and the substantial improvement in people's living standards,China has made remarkable achievements.But at the same time,the income disparity between urban and rural residents is widening.1%of households with the highest income account for one-third of the country's wealth,while 1/4 of households with the lowest income only own 1%of the country's wealth(the Blue Book of Chinese Society released by the Chinese Academy of Social Sciences in 2016).The phenomenon of"the rich second-generation,the poor second-generation,the children of powerful officials and monopolists" also reflects the curing trend of inter-generational income,and reflects the difference of inter-generational income mobility of different income groups between urban and rural residents in China.The decline of inter-generational income mobility means that wealthy families transfer their economic superiority to their children,while children from poor families inherit their parents' economic inferiority which is not conducive for children from poor families to the improve their economic status and is also a manifestation of social opportunity inequality.However,how much is the difference of the inter-generational income mobility between urban and rural income groups in China?And through what kind of mechanism it works?At present.the academic community has made few comparative analyses on different income groups in urban and rural areas focusing on inter-generational income mobility.Therefore,the study in this paper is critical for improving inter-generational income mobility,reducing opportunity inequality and thus narrowing income disparity.This paper uses the data of CHIP 2002,2007 and 2013 to estimate and analyze the inter-generational income mobility of different income groups of urban and rural residents and its mechanism.Firstly,a comparative analysis on the overall inter-generational income mobility of different income groups in urban and rural areas has been made by using the method of quantile regression.Secondly,the contribution of education and occupation to the inter-generational income mobility of urban and rural residents has been estimated by using the method of conditional inter-generational income elasticity and Blanden decomposition.Finally,the influence of education and occupation on the inter-generational income mobility mechanism among different income groups in urban and rural areas has been analyzed.The conclusions of this paper are as follows:(1)From the overall perspective,from 2002 to 2013,the overall inter-generational income mobility of rural residents was higher than that of urban residents,and it showed a trend of rising first and then declining.Specifically,the inter-generational income mobility of urban and rural residents in 2002 was 0.650 and 0.751 respectively.That was 0.666 and 0.825 respectively in 2007,and that was 0.662 and 0.779 respectively in 2013.(2)From the perspective of different quantiles,with the increase of the quantile of the child-generation in 2002,the inter-generational income mobility of urban residents showed a trend of declining first and then rising;In 2007,the inter-generational income mobility of middle-income group was higher,while that of low-income group and high-income group was lower.In 2013,the inter-generational income mobility of urban residents increased with the rising of the quantile of the child-generation.During 2002 to 2013,the inter-generational income mobility of rural residents increased with the rising of the quantile of the child-generation from 2002 to 2013.(3)Education and occupation are important means for influencing the inter-generational income mobility of urban and rural residents.Of which,the contribution of education to the mechanism of inter-generational income mobility of urban and rural residents was 6.7%and 5.5%respectively.The contribution of occupation to the mechanism of inter-generational income mobility of urban and rural residents was 3.1%and 1.4%respectively.(4)The rate of return on education of low-income groups and high-income groups is significantly higher than that of middle-income groups.If the parents are the heads of state organs.Party Organizations,enterprises and public institutions,their influence on their children increases with the rising of the quantile of the income of their child-generation.If the parents are people who are engaged in industries such as agriculture,forestry,animal husbandry,water conservancy,production and transportation,their influence on their children decreases with the rising of the quantile of the income of their child-generation.Based on the conclusions of the paper,the following proposals are made:(1)To promote the reform of the household registration system for urban and rural residents,so that rural residents can enjoy the same educational resources,social security and employment opportunities as urban residents.(2)To make larger investment in education and to optimize urban and rural educational resources.(3)To simplify the loan procedures and make it easy for low-income groups,so that they have the ability to afford the investments on their children's education and investments on other aspects,so as to improve the inter-generational income mobility.(4)To increase vocational training for low-income groups and provide them with more job opportunities.