The Long-Term Consequences of Family Class Origins in Urban China

Abstract

I study the long-term impact of class identity (chengfen) on individuals’ income and households’ wealth in urban China using Chinese Household Income Project (CHIP) data. Chinese government launched movements to make income and consumption in cities substantially homogeneous and assigned an inheritable class identity to each family in the 1950s. The government then implemented class-based discriminatory policies against the rich and middle class until 1978. I show that the policy is effective in reducing the political and educational opportunities of people with rich or middle class background, however, it does not break the law of intergenerational transmission of wealth status: individuals with poor class origins still have significantly lower income and family assets per capita than those from the rich class. The only exception is for those individuals with revolutionary background and Chinese Community Party (CCP) members from the poor class. Their income is not significantly different from those with rich class background.