Transfer Payments And Intergenerational Income Mobility

Equal opportunity and income equality are two important public policy objectives of the Government. In recent years, however, unequal income distribution and the social stratification has become the public concern. Due to the limitation of own condition, it is hard to change the status for the single family. The government's public policy becomes an important factor to change this social cured state, and it is an important channel to affect future income of children except of parents' factors. As an important means of public policy, government transfer payments can protect the basic inter-regional public goods such as education and infrastructure. Education has a very important influence on intergenerational income mobility. Especially as a solidified society, education is an important way to get rid of the shackles of class and obtain the fair employment opportunities. The transfer Payments help to improve the level of education for family members, thereby improving the intergenerational income mobility. This article makes it possible that the government factors are concerned except the family factors. It is from a policy perspective to explore the way to improve intergenerational income mobility, improving the state of income distribution, narrowing the gap between rich and poor and trying to step over the "poverty trap".In this paper, we use the data of CFPS and transfer payments of counties, researching the effects of transfer payments to intergenerational income. We find that Transfer Payment has a positive role in promoting intergenerational income mobility, and the daughter's degree of improving income mobility is higher than the son. The special transfer payments to improve the intergenerational income mobility is helpful for central and western regions, while the eastern region is not beneficial. The financial transfer payment can reduce the intergenerational transmission of income in rural areas, narrowing the income gap. Given the significant impact on the intergenerational income mobility of transfer payments, government departments need further measures to increase the area of transfer payments, reasonable allocation of special funds and the financial transfer payments to enhance the degree of social equity.