Intergenerational transmission of education in China: New evidence from the Chinese Cultural Revolution

• Author: Yanbin Chen,Yumei Guo,Jingyi Huang,Yang Song
• DOI: http://doi.org/10.1111/rode.12558
• Date: 01 February 2019
• Published date: 01 February 2019

REGULAR ARTICLE

Intergenerational transmission of education in

China: New evidence from the Chinese Cultural

Revolution

Yanbin Chen

1

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Yumei Guo

2

|

Jingyi Huang

3

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Yang Song

1

1

Renmin University of China, Beijing,

China

2

Central University of Finance and

Economics, Beijing, China

3

University of Michigan, Ann Arbor,

Michigan

Correspondence

Yang Song, School of Economics,

Renmin University of China, Mingde

Building, Room 617E, No. 59,

Zhongguancun Street, Beijing, China

100872.

Email: ys337@ruc.edu.cn

Funding information

Project supported by Fund for Building

World-class Universities (disciplines) of

Renmin University of China, National

Natural Science Foundation of China

(71403281), and National Social Science

Foundation of China (18VSJ071).

Abstract

This paper estimates the effect of parental education on

children's education by using instruments generated by

the Chinese Cultural Revolution, and further explores the

mechanisms of this causal relationship. Several important

findings stand out from our empirical analyses. We find a

larger intergenerational persistence in education for higher

level in urban areas but for a lower level of education in

rural areas. The main results from instrumental variable

estimation show that the nurture effect is larger and more

significant for fathers than for mothers. A deeper investi-

gation of the mechanism behind this nurture effect

informs us that a father's education passes on to his chil-

dren's education partly through the income channel.

Another notable finding is that even after controlling for

fathers’income, parental education still has a significantly

positive effect on children's education through the nurture

effect. This indicates that beyond the income channel,

there may exist other channels such as better home envi-

ronment, which deserve to be explored in future research.

KEYWORDS

China, inequality, intergenerational education mobility, nurture effect

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INTRODUCTION

Intergenerational mobility in income has received much attention in economics literature (Solon,

1999; Black & Devereux, 2011). This issue is particularly important in a developing country such

as China where income inequality increased dramatically since the 1980s with the transition from

DOI: 10.1111/rode.12558

Rev Dev Econ. 2019;23:501–527. wileyonlinelibrary.com/journal/rode © 2018 John Wiley & Sons Ltd

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a planned economy to a market‐oriented economy (Meng, Gregory, & Wang, 2005; Benjamin,

Brandt, & Giles, 2011; Song, 2013). Several studies have identified an imp ortant role of parental

education in the transmission of economic status from one generation to the next (Gong, Leigh, &

Meng, 2012; Yuan & Lin, 2013; Magnani & Zhu, 2015; Fan, 2016).

Two commonly recognized mechanisms behind this intergenerational transmission are nature

and nurture effects. The nature effect refers to the intergenerational education transmission related

to inherent abilities that parents pass to their children through genes, while the nurture effect refers

to a causal effect of parental education on children's schooling through educational investment, bet-

ter home environment, and so on. In econometric terms, the nurture effect is interpreted as the cau-

sal relationship while the nature effect results in the potential endogeneity problem.

A major contribution of this paper is to estimate the nurture effect using instruments generated by the

Chinese Cultural Revolution and to test the mechanisms through which the nurture effect works. We will

also examine several heterogeneities in different dimensions of these transmission effects. For the purpose

of this research, the newly released CHIP 2013 (China Household Income Project) dataset will be used.

Several important findings appear from our empirical analyses. First, intergenerational education

mobility is lower in urban as opposed to rural China. Second, more intergenerational persisten ce in

education tends to occur for a higher level of education in urban areas but for lower level of edu-

cation in rural areas. The high persistence found in rural areas for the lowest educat ion group

might be some evidence for educational poverty traps in that parents can pass their low educat ion

to their children which may create persistent poverty in income over generations. Third, the results

show that fathers’education has a significant impact on children's education through the nurture

effect, but mothers’nurture effect is relatively smaller. A deeper investigation of the mechanism

behind this nurture effect informs us that fathers’education can pass on to children's education

partly through the income channel. Another notable finding is that even after controlling for

fathers’income, parental education still has a significantly positive effect on children's educat ion

through the nurture effect. This indicates that beyond the income channel, there may exist other

channels such as better home environment, which deserve to be explored in future research.

The remainder of this paper is organized as follows. Section 2 reviews previous literature and

specifies our contributions, and Section 3 describes the dataset and presents some descriptive statis-

tics. Section 4 demonstrates the ordinary least squares (OLS) and instrumental variable (IV ) regres-

sion results to disentangle the nurture effect from the nature effect and explores the mechanisms

behind these effects. Section 5 concludes.

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LITERATURE REVIEW AND OUR CONTRIBUTIONS

This section will review the existing research in the area of exploring the intergenerational educa-

tion transmission and specify our contributions.

2.1

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Nature vs. nurture effect

Existing studies on this topic mainly focus on disentangling the nurture effect from the nature

effect through three identification strategies. The first is to use twin parents.

Behrman and Rosenzweig (2002) is one of the first studies that identify the nurture effect using

the children of monozygotic twin mothers and fathers, which can difference out genetic factors that

influence children's education. A more recent paper using this method is Bingley, Christensen, and

Jensen (2009). They use unique Danish administrative data for identical and fraternal twin parents

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CHEN ET AL.