The effects of education upward mobility on income upward mobility: evidence from China

Abstract

The effect of education on income has been debated in recent years. We use the China Health and Nutrition Survey database to research the relationship between education upward mobility and income upward mobility. We find education upward mobility has a positive effect on income upward mobility. The intergenerational psychological distance which is a measure of the difference between parents’ and children’s conceptualizations, parents’ social capital, and children’s gender all have effects on this relationship. To be specific, the positive effect is reinforced by a certain amount of intergenerational psychological distance, but is negated by an excessive amount of intergenerational psychological distance. Besides, education upward mobility actively increases the income upward mobility of rural-dwelling children whose parents lack social capital, i.e., education is a key factor that improves the income of children from rural families. In contrast, education upward mobility only actively increases the income upward mobility of urban-dwelling children whose parents have social capital. In addition, the positive effect of education on children’s income is more evident in boys than in girls. These findings greatly advance our understanding of the beneficial effects of education on the income, and will assist improvements to be made in these areas.