The Trend Research of Intergenerational Income Elasticity Change Between Father and Son

Abstract

Intergenerational income elasticity is one of the important indicators to measure degree of equality of opportunity, and can directly reflect the specific social fairness in some extent. This paper selected male samples from three provinces in central China nutrition survey (Henan, Hubei, Hunan), adopted double stage double least-squares method, to calculate the intergenerational income elasticity of three provinces in central through quantile regression analysis method and research the different income position and the change trend of intergenerational income elasticity. Research shows that: 1. the average of intergenerational income elasticity between 1989 and 2011 is 0.415, which belongs to superior middling, and means that the income mobility in these three central provinces is poor. 2. The overall level of the central provinces intergenerational income elasticity is rising, but income gradually becomes illiquid and appears inverted “U” shape from local view, which means intergenerational income elasticity value increased before 1997, then decreased after that. 3. According to the result of intergenerational income elasticity quantile regression, the social mobility of moderate income group is relatively weak than low-income groups and high-income groups, and the high-income groups’ income decision ability for offspring is limited.