Occupational Dualism and Intergenerational Educational Mobility in the Rural Economy: Evidence from China and India

Abstract

This paper extends the Becker-Tomes model of intergenerational educational mobility to a rural economy characterized by farm-nonfarm occupational dualism and provides a comparative analysis of rural China and rural India. The model builds a micro-foundation for the widely used linear-in-levels estimating equation. Returns to education for parents and productivity of financial investment in children's education determine relative mobility, as measured by the slope, while the intercept depends, among other factors, on the degree of persistence in nonfarm occupations. Unlike many existing studies based on coresident samples, our estimates of intergenerational mobility do not suffer from truncation bias. The sons in rural India faced lower educational mobility compared with the sons in rural China in the 1970s to 1990s. To understand the role of genetic inheritance, Altonji et al. (2005) biprobit sensitivity analysis is combined with the evidence on intergenerational correlation in cognitive ability in economics and behavioral genetics literature. The observed persistence can be due solely to genetic correlations in China, but not in India. Father's nonfarm occupation was complementary to his education in determining a sons' schooling in India, but separable in China. There is evidence of emerging complementarity for the younger cohorts in rural China. Structural change in favor of the nonfarm sector contributed to educational inequality in rural India. Evidence from supplementary data on economic mechanisms suggests that the model provides plausible explanations for the contrasting roles of occupational dualism in intergenerational educational mobility in rural India and rural China.

Dynastic Measures of Intergenerational Mobility

“…6 Novel data on intergenerational mobility in 18 Latin American countries are provided by Neidhöfer et al (2019). Several studies also focus on mobility in India (Azam and Bhatt, 2015, Emran and Shilpi 2015, Asher et al, 2018 and China (Golley and Kong, 2013, Emran and Sun, 2015, Emran et al, 2020. 7 Alesina et al (2020) match individuals to their parents using data on cohabitants of different generations.…”

Dynastic Measures of Intergenerational Mobility

“…6 Novel data on intergenerational mobility in 18 Latin American countries are provided by Neidhöfer et al (2019). Several studies also focus on mobility in India (Azam and Bhatt, 2015, Emran and Shilpi 2015, Asher et al, 2018 and China (Golley and Kong, 2013, Emran and Sun, 2015, Emran et al, 2020. 7 Alesina et al (2020) match individuals to their parents using data on cohabitants of different generations.…”

Social Mobility and Horizontal Inequality

“…That said, it is worth highlighting that all measures spotlight different aspects of horizontal inequality and some are more appropriate than others in considering certain arguments. For instance, Emran, Ferreira, Jiang, and Sun (2020) points additionally to the relevance of variance in outcomes.…”