Intergenerational Income Mobility And Mechanism Of Urban And Rural Residents In China

Great changes have taken place since the Chinese Economic Reform and Open Up Policy.On one hand,China has achived remarkable accomplishment and progress.In specific,the size of our economy has been growing rapidly and the living standard and income of both rural and urban resident has increased significantly.On the other hand,the gap between the poor and the rich has increasd and the issue of income inequality has been received increasingly attention.The growth of income inequality goes against the steady economic growth and social stability.So what measures Chinese policy makers should take to narrow the gap between the poor and the rich,promote the sustainability of economic growth and the harmony of society?One of the most important way is to maintain the income mobility of the society,especially intergenerational income mobility.In order to increase the intergenerational income mobility,it is necessary to analysis the intergenerational income mobility and its variation over time,age and household registration.Besides,it is also important to investigate the transmission mechanism of intergenerational income mobility.Hence,this paper tries to summarise the facts of intergenerational income mobility in China in all directions.Furthermore,it also explores the transmission mechanism of income mobility from the perspective of human capital and social capital.Besides,this paper also gives policy advices that can increase the level of intergenerational income mobility in China.This research tries to answer the two questions below.Firstly,what is the level of intergenerational income mobility in China from both overall and specific aspects?In other words,the facts of intergenerational income mobility.Secondly,what the role of human capital and social capital plays in the transmission of intergenerational income mobility.Shortly,the transmission mechanism of intergenerational income mobility.This paper answers the two questions above after reviewing a large number of literatures in this fields.In specific,based on the panal data of China Health and Nutrition Survey from 1989 to 2011,Chapter 3 and Chapter 4 measure intergenerational income mobility from overall and specific aspects.These two chapters use different a set of measures,includes Intergenerational Income Elasticity,Rank-Rank Slope,Transition Probabilities and Directional Rank Mobility,that can measures the direction and extent of the intergenerational income mobility.These two chapters also make comparsions between different ages and different household registrations.Chapter 5 and Chapter 6 uses the data of China Family Panel Studies and focus on the transmission mechanism of intergenerational income mobility from the perspective of human capital and social capital.Beside,in order to understand the effects of human capital and social capital on the transmission of intergenerational income mobility more specific,Chapter 5 and Chapter 6 also explore differences in intergenerational income mobility of different ages and household registrations.The main conclusions are given below.(1)From overall aspect,the national,urban and rual intergenerational income mobilities all have increased since 2000.But the intergenerational income mobility of urban resident grew much slower than rural resident.And the gap between rural and urban resident's intergenerational income mobility has been widen,which is nothelpful to narrow the income gap between rural and urban resident.Besides,compared to 60's resident,the 70 's resident shows higher intergenerational income mobility.And the rural 60's and 70's intergenerational income mobility is much higher than the urban 60's and 70's respectively.(2)From specific aspect,the national upward intergenerational income mobility has been increased since 2000.And the extent of the national upward intergenerational income mobility has also been intensified.However,the national downward intergenerational income mobility has been decreased slightly.And so is the extent of national downward intergenerational income mobility.Besides,the differences in directional intergenerational income mobility(upward/downward intergenerational income mobility)between 60's and 70's varied over income rank.(3)Human capital plays a very important role in the transimission of intergenerational income.Specifically,high parent income increases the level of children's human capital.As is known to all,the increase of children's human capital raises the income of the children.The 2SLS result shows that parent income plays a causal role in children's human capital.Besides,the parent income of both rual and urban residents help increase the level of children's human capital.However,the positive effect of urban resident is higher than rurual resident.(4)Social capital also plays a very important role in the transimission of intergenerational income.In specific,higher parent income increases the level of children's social capital.And the children's social capital increases the children's income.The 2SLS results shows that there is a cause and effect relationship between parent income and children's social capital.Besides,the urban and rural residents' social capital both plays an important role in the transimission of intergenerational income.However,the positive effect of the former is higher than the latter.The highlights of the dissertation are given below.(1)This paper measures intergenerational income mobility in China by using Rank-Rank Slope,Transition Probabilities and Directional Rank Mobility and other measurements to make the estimates more accurate and rich.Compared with exsiting national literatures,this dissertation provides a new method in measuring intergenerational income mobility in China.(2)This dissertation proves' the causal effect of parent income on children's human capital and social capital by using Instrumental Variable Method,breaking the limitation of exsiting national literatures ignoring endogeneity.Hence,this dissertation make a contribution to the approaches in related national researches.(3)The directional intergenerational mobility measurements used in this dissertation can measure the direction and extent of the intergenerational income mobility,which provides a new perspective in related national literatures.