Household income or parental years of schooling: Which is more important for children's years of schooling in China

Both of household income and parental education level play important roles on children to achieve high education levels. Based on CHNS data, this paper analyzes the relative effect of household income and the effect of parental years of schooling on children's years of schooling by using OLS regression. The OLS results show that both household income and parental years of schooling are positively and statistically associated with children's years of schooling. Household income plays a more important role on children's years of schooling than parental years of schooling. The study also suggests that the household income has a more positive effect on daughter than on son. The further findings of the household income by 5 groups of these households from low income to high income implies that the effects of household income on children's years of schooling could be described as a bell shape. The final findings also suggest that family resources, no matter in terms of household income or parental years of schooling, have more impacts on years of schooling of children living in rural area than years of schooling of children living in urban area.