The Impact Of Labor Market Skills Segmentation On Intergenerational Mobility

In addition to personal factors,personal income is also affected by family environmental factors,which is what we often call the "second generation" phenomenon.Income inequality affected by personal factors is a static income gap problem,while family environment affects income distribution over a longer period(usually decades),that is,intergenerational income mobility.In terms of time,it should also be more concerned,because it measures whether the process of income distribution is fair.Intergenerational income mobility can be reflected by the intergenerational income elasticity,which is the percentage increase in children's income when parental income increases by 1%.Intergenerational wealth transfer and intergenerational mobility are also important aspects of human capital research,because human capital is one of the important determinants of income levels.From the perspective of human capital investment,the most important way is education.The purpose of individuals' investment in education is to obtain more knowledge and better skills to improve their bargaining power in the labor market and increase personal income.However,it is important to note that,as a commodity in the labor market,China 's labor force is not free to move,which means that there is a certain degree of “segmentation” in the labor market,leads to certain restrictions on labor employment and affects households' human capital investment decisions for the next generation.The labor market segmentation form that this article focuses on is the skill segmentation based on the dual labor market theory.Specifically,the skills segmentation of the labor market is characterized by different income levels between different industries in China.The income level of high-skilled industries(corresponding to the requirements of higher human capital)is higher than that of lowskilled industries(requirements of relatively lower human capital).low).High-skilled talents can apply for both high-skilled and low-skilled industries,but low-skilled talents can only apply for jobs in low-skilled industries.Does the skill segmentation in the labor market have an impact on intergenerational income mobility,and if so,what is the impact mechanism and extent? This article takes human capital investment as the starting point,first constructs a labor market equilibrium model,and elaborates the impact of labor market skill segmentation on intergenerational mobility from a theoretical level;then conducts empirical analysis and uses data to verify the impact mechanism of labor market skill segmentation on intergenerational mobility.The theoretical model is divided into two parts.The first part constructs a family education investment decision-making model with nested parental income levels.The model results show that the family 's human capital investment in the offspring is the increasing functions of family income level,the parents' preferences for offspring income levels and labor market preferences for highly skilled workers.The second part introduces the intergenerational mobility difference model and examines the influencing factors of intergenerational income elasticity by the level of human capital investment corresponding to maximizing household utility.The model results show that intergenerational income elasticity is a decreasing function of household human capital investment.To further integrate the theoretical model of the first part,when the labor market's skill division is more biased towards high-skilled labor,it will lead to a decrease in intergenerational income elasticity and increase intergenerational mobility.Then,this paper uses the data of the 2013 China Household Income Survey and the 1998-2009 China Industrial Enterprise Database to test the impact of the degree of labor market segmentation on intergenerational income elasticity.The key variable,employment skill structure was first constructed using the industrial enterprise database as an agent variable for the degree of labor market skill segmentation;then two econometric models were constructed to verify the impact of labor market segmentation on human capital investment and intergenerational income elasticity.The empirical results show that,based on controlling the offspring's age,endowment inheritance and other variables,for each 10% increase in the proportion of regional high-skilled industries,the offspring's average education duration increases by about 0.183 years,and the intergenerational logarithmic income elasticity decreases by about 11.60 %.Finally,the impact mechanism verification and robustness test were carried out,and it was found that the skill segmentation of the labor market affects the elasticity of intergenerational income to some extent through family human capital investment,and econometric model used in the empirical process has certain robustness.Based on the results of theoretical analysis and empirical analysis,this article finally puts forward three policy recommendations: first,we must pay attention to industrial structural reform and give priority to the development of high-tech industries;second,we must increase the input and efficiency of public education resource allocation to reduce intergenerational income Elasticity and improves intergenerational mobility;finally,the government should increase its efforts to encourage technological innovation and knowledge progress,guide society's recognition of technological innovation,and stimulate the scientific and sustainable development of our economy.