IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v74y2021icp13-22.html
   My bibliography  Save this article

Does government education expenditure boost intergenerational mobility? Evidence from China

Author

Listed:
  • Tang, Le
  • Sun, Shiyu
  • Yang, Weiguo

Abstract

This article assesses the relationship between government education spending and intergenerational mobility using parent-child pair information from the China Family Panel Studies (CFPS) and data on government education expenditure from the China Educational Finance Statistical Yearbook, Provincial Statistical Yearbook and China City Statistical Yearbook. We introduced family classification (chengfen) as the instrumental variable for permanent income and used child income for the age bracket 23–40 as the approximation for lifetime earnings to minimize estimation bias. We found that the intergenerational elasticity in China is about 0.384 and the government education expenditure boosted the intergenerational mobility. Moreover, we estimated the absolute mobility in China. And our analysis pointed to the importance of government spending in increasing the intergenerational mobility of underdeveloped family and improving equality of opportunity in China.

Suggested Citation

  • Tang, Le & Sun, Shiyu & Yang, Weiguo, 2021. "Does government education expenditure boost intergenerational mobility? Evidence from China," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 13-22.
    • Handle: RePEc:eee:reveco:v:74:y:2021:i:c:p:13-22
    DOI: 10.1016/j.iref.2021.02.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056021000265
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2021.02.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jantti, Markus & Bratsberg, Bernt & Roed, Knut & Raaum, Oddbjorn & Naylor, Robin & Osterbacka, Eva & Bjorklund, Anders & Eriksson, Tor, 2005. "American exceptionalism in a new light: a comparison of intergenerational earnings mobility in the Nordic countries, the United Kingdom and the United States," Economic Research Papers 269752, University of Warwick - Department of Economics.
    2. Rasmus Landersø & James J. Heckman, 2017. "The Scandinavian Fantasy: Sources of Intergenerational Mobility in Denmark and the US," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(1), pages 178-230, January.
    3. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    4. Honge Gong & Andrew Leigh & Xin Meng, 2012. "Intergenerational Income Mobility In Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(3), pages 481-503, September.
    5. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, vol. 96(4), pages 1308-1320, September.
    6. Yi Fan & Junjian Yi & Junsen Zhang, 2021. "Rising Intergenerational Income Persistence in China," American Economic Journal: Economic Policy, American Economic Association, vol. 13(1), pages 202-230, February.
    7. Pekkarinen, Tuomas & Uusitalo, Roope & Kerr, Sari, 2009. "School tracking and intergenerational income mobility: Evidence from the Finnish comprehensive school reform," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 965-973, August.
    8. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    9. Thorsten Vogel, 2006. "Reassessing Intergenerational Mobility in Germany and the United States: The Impact of Differences in Lifecycle Earnings Patterns," SFB 649 Discussion Papers SFB649DP2006-055, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    10. Jo Blanden, 2013. "Cross-Country Rankings In Intergenerational Mobility: A Comparison Of Approaches From Economics And Sociology," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 38-73, February.
    11. Christopher Herrington, 2015. "Public Education Financing, Earnings Inequality, and Intergenerational Mobility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(4), pages 822-842, October.
    12. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 16, pages 1487-1541, Elsevier.
    13. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    14. Mayer, Susan E. & Lopoo, Leonard M., 2008. "Government spending and intergenerational mobility," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 139-158, February.
    15. Björklund Anders & Jäntti Markus & Solon Gary, 2007. "Nature and Nurture in the Intergenerational Transmission of Socioeconomic Status: Evidence from Swedish Children and Their Biological and Rearing Parents," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(2), pages 1-23, November.
    16. Shea, John, 2000. "Does parents' money matter?," Journal of Public Economics, Elsevier, vol. 77(2), pages 155-184, August.
    17. Nakamura, Tamotsu & Murayama, Yu, 2011. "Education cost, intergenerational mobility, and income inequality," Economics Letters, Elsevier, vol. 112(3), pages 266-269, September.
    18. Dearden, Lorraine & Machin, Stephen & Reed, Howard, 1997. "Intergenerational Mobility in Britain," Economic Journal, Royal Economic Society, vol. 107(440), pages 47-66, January.
    19. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
    20. James B. Davies & Jie Zhang & Jinli Zeng, 2005. "Intergenerational Mobility under Private vs. Public Education," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 399-417, September.
    21. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800, Elsevier.
    22. Ndlovu, Godfrey & Toerien, Francois, 2020. "The distributional impact of access to finance on poverty: evidence from selected countries in Sub-Saharan Africa," Research in International Business and Finance, Elsevier, vol. 52(C).
    23. Kelly Labart, 2011. "Intergenerational Mobility in China," Working Papers halshs-00556982, HAL.
    24. Iyigun, Murat F, 1999. "Public Education and Intergenerational Economic Mobility," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 697-710, August.
    25. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
    26. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-1189, December.
    27. Yang, Juan & Qiu, Muyuan, 2016. "The impact of education on income inequality and intergenerational mobility," China Economic Review, Elsevier, vol. 37(C), pages 110-125.
    28. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-429, June.
    29. Thanh, Su Dinh & Canh, Nguyen Phuc & Ha, Nguyen Tran Thai, 2020. "Debt structure and earnings management: A non-linear analysis from an emerging economy," Finance Research Letters, Elsevier, vol. 35(C).
    30. Rey Dang & Hocine Houanti & Jean-Michel Sahut & Michel Simioni, 2021. "Do women on corporate boards influence corporate social performance? A control function approach," Post-Print hal-02891765, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maria Berrittella, 2023. "Socioeconomic effects and the role of public spending decomposition on income mobility: a moderated regression model," International Journal of Economic Policy Studies, Springer, vol. 17(1), pages 187-210, February.
    2. Junwu, Xu & Zhaoxiong, Chen & Junjie, Wu, 2022. "Return of migrant workers, educational investment in children and intergenerational mobility in China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 997-1009.
    3. Huang, Xiao & Huang, Shoujun & Shui, Ailun, 2021. "Government spending and intergenerational income mobility: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 387-414.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huang, Xiao & Huang, Shoujun & Shui, Ailun, 2021. "Government spending and intergenerational income mobility: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 387-414.
    2. Bhashkar Mazumder, 2018. "Intergenerational Mobility in the United States: What We Have Learned from the PSID," The ANNALS of the American Academy of Political and Social Science, , vol. 680(1), pages 213-234, November.
    3. Lijie Song, 2021. "Does Public Investment Promote Intergenerational Mobility? Who Really Benefits?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(1), pages 59-80, November.
    4. Guido Neidhöfer, 2019. "Intergenerational mobility and the rise and fall of inequality: Lessons from Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(4), pages 499-520, December.
    5. Daniel D. Schnitzlein, 2016. "A New Look at Intergenerational Mobility in Germany Compared to the U.S," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(4), pages 650-667, December.
    6. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Robert Lucas & Sari Kerr, 2013. "Intergenerational income immobility in Finland: contrasting roles for parental earnings and family income," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1057-1094, July.
    8. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    9. Zhang, Xinmiao & Deguilhem, Thibaud, 2022. "Climbing the Social Ladder: Does Intergenerational Solidarity matter?," MPRA Paper 115241, University Library of Munich, Germany.
    10. Doan, Quang Hung & Nguyen, Ngoc Anh, 2016. "Intergenerational Income Mobility in Vietnam," MPRA Paper 70603, University Library of Munich, Germany.
    11. Bertha Rohenkohl, 2019. "Intergenerational Income Mobility in the UK:New evidence using the BHPS and Understanding Society," Working Papers 2019017, The University of Sheffield, Department of Economics.
    12. Hellier, Joël, 2017. "Stratified higher education,social mobility at the top and efficiency: The case of the French ‘Grandes écoles’," MPRA Paper 76724, University Library of Munich, Germany.
    13. Florencia Torche, 2015. "Analyses of Intergenerational Mobility," The ANNALS of the American Academy of Political and Social Science, , vol. 657(1), pages 37-62, January.
    14. Quheng Deng & Björn Gustafsson & Shi Li, 2013. "Intergenerational Income Persistence in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(3), pages 416-436, September.
    15. Rauh, Christopher, 2017. "Voting, education, and the Great Gatsby Curve," Journal of Public Economics, Elsevier, vol. 146(C), pages 1-14.
    16. Qin, Xuezheng & Wang, Tianyu & Zhuang, Castiel Chen, 2016. "Intergenerational transfer of human capital and its impact on income mobility: Evidence from China," China Economic Review, Elsevier, vol. 38(C), pages 306-321.
    17. Leone, Tharcisio, 2019. "The geography of intergenerational mobility: Evidence of educational persistence and the "Great Gatsby Curve" in Brazil," GIGA Working Papers 318, GIGA German Institute of Global and Area Studies.
    18. Coban, Mustafa & Sauerhammer, Sarah, 2017. "Transmission channels of intergenerational income mobility: Empirical evidence from Germany and the Unites States," Discussion Paper Series 138, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    19. Shu Wang & Xiao Yu & Kuo Zhang & Jipeng Pei & Karlis Rokpelnis & Xuelong Wang, 2022. "How does education affect intergenerational income mobility in Chinese society?," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 774-792, May.
    20. Francesco Bloise & Michele Raitano, 2019. "Intergenerational earnings elasticity of actual father-son pairs in Italy accounting for lifecycle and attenuation bias," Working Papers 504, ECINEQ, Society for the Study of Economic Inequality.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:74:y:2021:i:c:p:13-22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.