The Analysis On The Contribution Rate Of Intergenerational Income Mobility To Income Gap In China

According to the official announcement, the Gini coefficient of China in 2012 and 2013 are 0.474 and 0.473, which means that there is severe problem of income gap in our country. However, the widening of income gap is caused by many reasons, one of them is unequal opportunity, which causes a sustained income gap. Researches on unequal opportunity started earlier in the foreign countries than in China. According to the researches, we can use intergenerational income mobility to measure the opportunity inequality, the intergenerational income mobility is also called intergenerational income elasticity. We can measure intergenerational income elasticity through quantile regression method under different points, and then calculate the contribution rate of intergenerational income mobility. The effect on income gap made by the opportunity inequality is calculated.This essay uses STATA software to deal with data and empirical analysis. The female sample is not eliminated, empirical analysis contains two samples, one is sample of fathers and their children( father sample for short), the other is sample of mothers and their children( mother sample for short).Because of that the transmission effect between intergeneration is different under different income levels, it’s necessary that we divide the samples into 5 groups, which are 10 quantile, 25 quantile, 50 quantile, 75 quantile, 90 quantile. According to the empirical results we find the following:(1)With the rise of quantile level, the shape of income elasticity of intergenerational is an inverted "U";(2) On the same quantile level, the income elasticity of intergenerational income elasticity of father’s sample is greater than that of mother sample.In the field of income gap, the analysis of the contribution rate is mainly about the same generation, using the Gini coefficient, Theil index and the like, which decompose the contribution rate of a certain factor to the income gap, this is analysis from static perspective. Estimating the contribution rate of intergenerational income mobility to income gap analyzes the children’s income gap caused by intergeneration, which is analysis from dynamic perspective.Based on this perspective, the income gap is mainly composed of two parts. one is caused by children’s unequal opportunity, the other is caused by children’s personality characteristics. The former mainly refers to the influence of intergenerational income mobility on filial generation’s income. The contribution rate of intergenerational income mobility of the father sample to income gap respectively are 1.017, 0.790, 0.836, 0.727, 0.576, that of the mother sample are 1.487, 0.983, 1.370, 0.877, 0.711. We can conclude that filial generation’s income gap is mainly caused by the intergenerational income mobility.Therefore, we can offer the following suggestions: Adjusting income distribution structure; Improving the tax system of personal income tax, because adjusting different levels of income only is not reliable; Paying attention to the development of education, improving the reform of education system; Improving the social and medical security system, which is also related to people’s livelihood issues.