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

Abstract

The Chinese government redistributed houses, land and wealth across families and assigned an inheritable class identity (chengfen) to each family in early 1950s. The government then implemented class-based discriminatory policies against the rich and middle class until 1978. This paper shows that individuals born after 1951 with rich class origins have significantly higher income and family assets per capita than those from the poor class in 2002. Moreover, those who were born after 1960 from rich class gained more years of education than others except for the descendants of the revolutionary class, after the abolition of the discrimination policy. Overall, the study provides evidence that intergenerational transmission of wealth status and education are not necessary flowing through the inheritance of physical capital. The paper further demonstrates that individuals with revolutionary background do not have lower economic outcome or educational attainment than those from the rich, suggesting that a new elite group emerges in contemporary China.