Are the Children of Uneducated Farmers Doubly Doomed? Farm, Nonfarm and Intergenerational Educational Mobility in Rural China

This paper relaxes the single factor model of intergenerational educational mobility standard in the literature, and develops a research design to study the effects of parents' education and occupation on children's schooling. We use survey data from rural China that cover three generations and are not subject to coresidency bias. The evidence from recently developed matching and propensity score weighted estimators shows that the mean effects of parents education from the standard model miss substantial heterogeneity. Within the low education subsample, a son (girl) attains about 0.80 (0.60) years of additional schooling when born into a non-farm household compared to a farm household, and among the farming households, a child gains a one year of schooling when at least one parent has more than primary schooling. Having nonfarm parents, however, does not confer any advantages over the farmer parents if the farmers are relatively more educated, even though nonfarm households have significantly higher income. This suggests that income plays a secondary role to parental education. Estimates of cross-partial effects without imposing functional form show little evidence of complementarity between parental education and non-farm occupation. The role of family background remains stable across generations for girls, but for boys, family background has become more important after the market reform