Study On The Transmission Of Itergenerational Income Inequality In China

There are two main characteristics of China's income inequality: First,The degree of income inequality has declined,but still stayed at a high level.According to figures released by the National Bureau of Statistics,the Gini Coefficient of Chinese resident income continued to decline after 2008,but remained at a high level(0.46-0.49).Second,the gap between the rich and the poor in China has been stable The simultaneous emergence of the "rich second generation" and "poor second generation" has become a hot debate in public recently.Both the public and news media have joint in the hot discussion of intergenerational income inequality.The "social class solidification" and "bottom class promotion difficulty" have become the prominent issue in the transition period.The Intergenerational income inequality is becoming the most prominent manifestation of China's unequal opportunity.Therefore,the problem of income distribution in China is not only the expansion income gap of residents,but also the coexistence of high income inequality and social class solidification.The problems above not only reduce the enthusiasm of labor and weaken the sustainable economic development,but also have terrible effects on social structure,raising the public's hostility to the rich,intensifying social contradictions,and affecting the stability and harmony of the society.More importantly,the high inequality of income will make the system and policy that achieve the equality of opportunity failure,thus become a threat to social stability and economic sustainable development.The coexistence of income inequality and social class solidification makes us not only study the income distribution of the same generation,but also study the relationship between the income inequality of different generations.In the study of income inequality in China,However,previous studies of income inequality are more concentrated in the same generation of income inequality.They either focus on measurement and decomposition of income inequality using existing index of income,or pay attention to the comparative analysis of income inequality between urban and rural areas,regions and industries.There is little research on income distribution from the perspective of intergenerational.Some scholars study the problem of income inequality from the perspective of intergenerational income mobility,but it can only tell us the relationship between the income of the two generation or the impact of intergenerational mobility on income inequality,but We still can not understand thestructural reasons of intergenerational income inequality and the transmission mechanism behind it.This study discusses the intergenerational transmission of income inequality in China under the background of income inequality and class solidification to show the overall trend and internal mechanism of the change of intergenerational income inequality,and put forward policy suggestions that can weaken the degree of the intergenerational transmission of income inequality,narrow the gap between the rich and the poor,help low-income groups to get rid of the poverty,and slow down the expanding trend of income inequality based on this.Compared with the existing literature,this paper has done the following work:Part 1: On the base of the measurement index of intergenerational income inequality that can be decomposed,this paper explore the trend of the change and the structural reason about the Chinese residents' income inequality between different generations in the past 20 years.Common inequality index can measure the degree of the income inequality and tell us its changes on the whole,but they cannot track the change of income position of parents and their offspring in the income distribution and the change of the intergenerational income inequality,so they cannot analyze the structural causes of change of intergenerational income inequality deeply.This paper constructs the measurement index of intergenerational income inequality that can be decomposed,and then,divides the five samples into four groups:expanding group,shrinking group,moderate group and mutation group based on the data of CHNS survey in 1989-2011.By using the index,this paper measure the inequality of parents and their offspring respectively,and calculate the contribution rate of each group to the change of intergenerational income inequality.The results show that the change of intergenerational income inequality depends on the decisive power of the expanding groups and narrow group,but because of the fluctuations in the contribution rate of the expanding group is larger than the shrinking group in five samples,that is to say,the change in the contribution of the expanding group determines the change trend of intergenerational income inequality.Part 2: By using the method of decomposition of inequality of opportunity,the transmission effect of intergenerational income inequality is decomposed through the setting model and constructing index.Through the decomposition of offspring's income,this study investigate the influence of the unequal opportunity of parents on their offspring's income,and then compare and analyze this influence between groups.In the existing literature,the method of equality of opportunity decomposition is directly using common inequality indicators to test the relationship between opportunity inequality and income inequality and calculate the opportunity inequality's contribution to the income inequality.But this study is not only to test the influence of parents' opportunity inequality on the income of the offspring,but also to compare the influence between groups(expanding group,and shrinking group).However,the expanding and shrinking groups are the whole sub sample with obvious characteristics,and therefore we can't directly calculate their Gini Coefficient using the existing methods to estimate the contribution of parents' opportunity inequality on children's income.Therefore,this study draws lessons from the Chendong's decomposition method of income inequality in 2005,which is the use and development of the theoretical model of Bourguignon et al(2003).On this basis,this paper constructs the intergenerational income inequality transmission effect index which can be used to measure the degree of intergenerational inequality,and then the effect of unequal opportunity of parents on the income of the offspring in the last 20 years was measured and compared between groups.The study found that: First,over the past 20 years,the national opportunity inequality caused by the generation of parents on the income of the offspring is inverted "V",the influence reached the peak value in 2005 and then decreased after that,and the whole effect is achieved by an average of 35.72%.Second,the opportunity inequality caused by the generation of parents on the income of the offspring in expending group is significantly higher than that of the whole sample and the shrinking group.Namely the opportunity inequality caused by parents widens the intergenerational income inequality.Third,compared with the expending group and the whole sample,the opportunity inequality caused by the generation of parents on the income of the offspring in the shrinking group is lower,in other words,the narrowing of the income inequality between generations is to a greater extent the role of their own efforts.Part 3: Based on the related theory of income inequality's intergenerational transmission mechanism,this study expands the application of intergenerational income inequality transmission effect index,and the influence of parents' opportunity inequality on offspring's income is decomposed into the influence of parents' human capital inequality and the influence of parents' social capital inequality.Through the above methods,this paper analyzes the path of intergenerational transmission of income inequality.The study found that: First,human capital and social capital playan important role in the transmission of intergenerational income inequality.Second,at present,Chinese labor market is not perfect and human relations play an important role in the economic life,so the influence of social capital inequality on the offspring's income is bigger than that of parents' human capital inequality.The phenomenon above is more prominent in the expanding group,in other words,the two factors play a significant role in the widening of income inequality,and the role of parents' social capital inequality is more significant.