Cathy Gong, Xin Meng and I have a new paper out, looking at intergenerational mobility in urban China. After making a bunch of adjustments to the data, we find a strikingly high intergenerational elasticity (implying a very low level of social mobility). The abstract is below – click on the title for the full paper.
Intergenerational Income Mobility in Urban China
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.