Intergenerational Transmission, Self-Effort and Income Gap between Urban and Rural Youth in China

Abstract

Based on the data of China Health and Nutrition Survey (CHNS) from 1991 to 2015, the effects of intergenerational income transmission and self-effort on the income gap between urban and rural youth under different quantiles were studied by using RIF's unconditional quantile regression and distribution decomposition method. The results show that the parents' income has a significant impact on the income of urban and rural youth in each quantile, and it is the main driving force to widen the income gap. By decomposing the intergenerational income elasticity, it is found that the intergenerational income of urban youth is mainly transmitted through education, while the rural youth is more reflected in the path of career transmission. Hard work has a strong impact on the income of urban and rural youth only in the middle and low quantiles, and the effect of rural youth is greater than that of urban youth. Hard work can reduce the income gap between urban and rural youth in the middle and low quantiles, but at the cost of "reverse discrimination" against rural youth.