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Aggregate implications of occupational inheritance in China and India

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  • Ji Ting

    (School of International Trade and Economics, Central University of Finance and Economics, 39 South College Road, Haidian District, Beijing 100081, China)

Abstract

This paper documents occupational inheritance – that is, children’s inheritance of their parents’ occupations – in China, India, and other countries. Among the causes of the prevalence of occupational inheritance, we target two broad categories that impede growth: labor market frictions and barriers to human capital acquisition. Counterfactual experiments based on a tractable occupational choice model suggest that if the impediments mentioned above were reduced to the US levels, labor productivity would grow by 60–75% in China and 107–178% in India. China realized 74–89% of this growth potential from the 1980s to 2009. In addition, this productivity gain is accompanied by a decrease in the correlation of intergenerational incomes.

Suggested Citation

  • Ji Ting, 2019. "Aggregate implications of occupational inheritance in China and India," The B.E. Journal of Macroeconomics, De Gruyter, vol. 19(1), pages 1-24, January.
    • Handle: RePEc:bpj:bejmac:v:19:y:2019:i:1:p:24:n:12
    DOI: 10.1515/bejm-2018-0030
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    References listed on IDEAS

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    More about this item

    Keywords

    human capital; intergenerational income mobility; intergenerational occupational mobility; labor productivity; occupational inheritance;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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