Are the Children of Uneducated Farmers Doubly Disadvantaged? Economic Reform, Structural Change and Intergenerational Educational Mobility in Rural China

This paper relaxes the single factor model of educational mobility and analyzes heterogeneous effects of family background on children’s education in rural China, with a focus on market reform and non-farm occupations. We use data on three generations in rural China spanning preand post-reform periods. Evidence from a battery of econometric approaches shows that the influence of family background remains stable for girls, but for boys, family background has become more important after market reform. The mean effects of parents education miss substantial heterogeneity across farm-nonfarm occupations. Having nonfarm parents, in general, has positive effects, but children of low educated non-farmer parents (with higher income) do not enjoy any advantages over the children of more educated farmer parents. Estimates of cross-partial effects without imposing functional form show little evidence of complementarity between parental education and non-farm occupation. We explore causality using three approaches: Rosenbaum sensitivity analysis, minimum biased IPW estimator and heteroskedasticity based identification. Our results suggest that the advantages of having more educated parents, especially with nonfarm occupations, are unlikely to be due solely to selection on genetic transmissions. However, the estimated positive effects of nonfarm over the farmer parents among the low educated households may be driven entirely by moderate selection on genetic endowment.