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Child Education and the Family Income Gradient in China

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Abstract

This paper looks at the relation between education and family income using a 2008-2009 survey of nearly 10,000 children in 15 cities and nine provinces throughout China. We use school test scores on mathematics and language, as well as parent-reported educational progress, out-of-pocket expenses, and self-reported quality of schooling. Across all measures, children from wealthier families do better, but the gap is much smaller for older children than younger children in rural areas and is almost entirely gone at the end of secondary school. In Chinese cities and in Western countries like the US the opposite is the case, with the gap between children from poor and rich households staying constant or even widening as the kids get older. Our explanation is that it takes a generation of universal education for ability, education, and parental income to become highly correlated, which will already have happened in Chinese cities and in Western countries, but is only just now happening in rural areas in China. Accordingly, the relation between family income and child ability increases over generations, reducing future education and income mobility.

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Paper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 470.

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Date of creation: 01 Oct 2012
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Handle: RePEc:qld:uq2004:470

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  1. Li, Haizheng, 2003. "Economic transition and returns to education in China," Economics of Education Review, Elsevier, vol. 22(3), pages 317-328, June.
  2. Tsang, Mun C., 1996. "Financial reform of basic education in China," Economics of Education Review, Elsevier, vol. 15(4), pages 423-444, October.
  3. Brandt, Loren & Holz, Carsten A, 2006. "Spatial Price Differences in China: Estimates and Implications," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 43-86, October.
  4. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 37-89.
  5. Brown, Philip H, 2006. "Parental Education and Investment in Children's Human Capital in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 54(4), pages 759-89, July.
  6. Zhang, Linxiu & Huang, Jikun & Rozelle, Scott, 2002. "Employment, Emerging Labor Markets, And The Role Of Education In Rural China," Working Papers 11969, University of California, Davis, Department of Agricultural and Resource Economics.
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  8. Ermisch, John & Francesconi, Marco, 2001. "Family Matters: Impacts of Family Background on Educational Attainments," Economica, London School of Economics and Political Science, vol. 68(270), pages 137-56, May.
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  11. Jo Blanden & Paul Gregg, 2004. "Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain," The Centre for Market and Public Organisation 04/101, Department of Economics, University of Bristol, UK.
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  14. Hannum, Emily & Wang, Meiyan, 2006. "Geography and educational inequality in China," China Economic Review, Elsevier, vol. 17(3), pages 253-265.
  15. Khanam, Rasheda & Nghiem, Hong Son & Connelly, Luke B., 2009. "Child health and the income gradient: Evidence from Australia," Journal of Health Economics, Elsevier, vol. 28(4), pages 805-817, July.
  16. Michael P. Keane, 2002. "Financial Aid, Borrowing Constraints, and College Attendance: Evidence from Structural Estimates," American Economic Review, American Economic Association, vol. 92(2), pages 293-297, May.
  17. Meng, Xin & Gregory, R G, 2002. "The Impact of Interrupted Education on Subsequent Educational Attainment: A Cost of the Chinese Cultural Revolution," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 935-59, July.
  18. Frenette, Marc, 2007. "Why Are Youth from Lower-income Families Less Likely to Attend University? Evidence from Academic Abilities, Parental Influences, and Financial Constraints," Analytical Studies Branch Research Paper Series 2007295e, Statistics Canada, Analytical Studies Branch.
  19. Katja Kaufmann, 2008. "Understanding the Income Gradient in College Attendance in Mexico: The Role of Heterogeneity in Expected Returns to College," Discussion Papers 07-040, Stanford Institute for Economic Policy Research.
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Cited by:
  1. Frijters, Paul & Kong, Tao & Meng, Xin, 2011. "Migrant Entrepreneurs and Credit Constraints under Labour Market Discrimination," IZA Discussion Papers 5967, Institute for the Study of Labor (IZA).

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