Like parents, like children? Intergenerational poverty transmission in China

Abstract

The intergenerational transmission of poverty has always been an important issue around the world. This study examines the effects of father’s and mother’s human and social capital on the income of their children in China by using the data obtained from the 2014 China Labor-force Dynamics Survey. The results show that (1) the effects of the human and social capital of the father and mother on the child’s income are heterogeneous. Specifically, the father’s education, father work industry and mother work industry have little effect on their child’s income. However, the mother’s education has a positive and significant effect on a child’s income. (2) The effect of the mother’s education on child’s income is significant but limited, on average, the marginal contribution of the mother’s education on the natural logarithm of the child’s income is only 1.0%. (3) The child’s human capital, including health, education, foreign language ability, and professional ability, significantly affects their income. (4) The results obtained from quantile regression and sub-sample regression support the above findings. Therefore, the effective means of intervening against the intergenerational transmission of poverty should be to help the individual improve their human capital, rather than starting with their parents.