Are we born equal: a study of intergenerational income mobility in China

Studies show that the gain from China’s remarkable growth of the past 35 years has not been evenly shared, especially through the intergenerational transmission of income. To address this concern, we use data from China Health and Nutrition Survey and find the intergenerational income elasticity to be 0.466 in 2011, which suggests that sons’ incomes are affected by their fathers’ economic statuses to a large extent. A cross-country comparison indicates that the degree of generational income mobility in China is lower than that in many developed nations. Meanwhile, by investigating possible transmission channels, we find that the fathers’ investments in the sons’ education and occupation play substantial roles in intergenerational transmission of income. The results not only demonstrate the trends in intergenerational income mobility in China, but also identify the most likely transmission channels, which is of great importance to improving social equality.