Intergenerational Mobility in China Across Space and Time

Abstract: Inequality is an important issue in many countries, and intergenerational mobility is one of the key mechanisms for alleviating inequality. What drives mobility? Why do some areas generate higher rates of mobility than others? This paper has two objectives. First, using individual data from censuses and surveys, I characterize the features of intergenerational mobility in China based on education and occupation for cohorts from 1949 to 1977. Second, I empirically investigate how intergeneration-transmitted aspirations can contribute to the emergence and persistence of social mobility. I report several findings. First, I show that there are substantial geographic variations in education- and occupation-based intergeneration mobility across prefectures in China. Second, I empirically examine the role of aspiration in explaining contemporary social mobility. Using the plausibly exogenous success rate for the bureaucrat selection examination (Keju) in ancient China as a proxy for historical aspirations and taking advantage of the extensive changes in prefecture boundaries since the founding of the People's Republic of China (PRC) in 1949, I find that aspirations increase upward mobility, and the effect happens to individuals in the low-to-middle quintiles in the education distribution. Third, using the victims of the anti-intellectual movement (the Cultural Revolution) in the 1970s as a proxy for the perceived drop in return to education, I show that return to education had a positive impact on determining upward mobility. Finally, I nd that in environments with more aspiration, individuals' upward mobility is more responsive to changes in the perceived return to education.