The Intergenerational Income Mobility Of China’s Urban Residents

This paper takes CHIP2002 survey date as sub-sample(parents sample), takes CGSS2012 and CGSS2013 as main sample(child sample), uses double sample instrumental variable model to estimate the intergenerational income elasticity of China’s urban residents and uses persistent income mechanism decomposition method to study the intergenerational income transfer mechanism. The result shows that the intergenerational income elasticity of mother and child is 0.6087, the intergenerational income elasticity of father and child is 0.5447. Human capital is the main transfer mechanism and the social capital is the second transfer mechanism.Based on the research, three policy suggestions are put forward in the paper. First, government should take positive measures to improve the supply of public education. The developing tendency of education capitalization should be inhibited. The related mechanism of the educational fund and educational loan should be improved. The vocational training school and preschool education institution should get fund support and policy support from government. Secondly, the government needs to constantly to improve the labor market. The employment information platform should be improved. Thirdly, Establish rules to normalize the recruitment process of enterprises. Break the "relationship" barrier in high-income industries.Hope this paper could be helpful to increase China’s intergenerational income mobility, to promote social opportunity equality and to promote the harmonious and stable development of China’s economy and society.