Working Paper: CEPR ID: DP13589
Authors: Carol H. Shiue
Abstract: This paper studies intergenerational mobility with a population of families in central China over twenty generations. Employing genealogical data on individual lifetime achievements, I first find that while mobility was low initially there was a striking increase in mobility starting in the late 17th century. Through the lens of a Becker-Tomes (1979) model I explain this through a falling human capital earnings elasticity because the return to passing the civil service examinations, China’s most important pathway to office and income at the time, declined over time. Second, as predicted by the model times of high human capital earnings elasticity are times of high cross-sectional inequality. Third, parent humancapital affects child income for any given nonhuman parental investment and is estimated to have 2/3 of the effect of nonhuman investments on child income. Moreover, educational inequality is even more strongly correlated with social persistence than income inequality. Finally, much of the observed increase in mobility is accounted for by lower differences in average clan income, consistent with the hypothesis that part of the earnings elasticity of human capital is group-specific.
Keywords: No keywords provided
JEL Codes: N35; N45; J62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| earnings elasticity of human capital (J24) | intergenerational mobility (J62) |
| parental income (D31) | child income (J13) |
| human capital investments (J24) | intergenerational mobility (J62) |
| intergenerational mobility (J62) | cross-sectional inequality (I24) |
| high human capital earnings elasticity (J24) | high cross-sectional inequality (I14) |
| clan membership (D71) | child income (J13) |
| civil service examination system changes (H11) | earnings elasticity of human capital (J24) |