Aggregate implications of occupational inheritance in China and India

Ji Ting ()
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Ji Ting: School of International Trade and Economics, Central University of Finance and Economics, 39 South College Road, Haidian District, Beijing 100081, China

The B.E. Journal of Macroeconomics, 2019, vol. 19, issue 1, 24

Abstract: This paper documents occupational inheritance – that is, children’s inheritance of their parents’ occupations – in China, India, and other countries. Among the causes of the prevalence of occupational inheritance, we target two broad categories that impede growth: labor market frictions and barriers to human capital acquisition. Counterfactual experiments based on a tractable occupational choice model suggest that if the impediments mentioned above were reduced to the US levels, labor productivity would grow by 60–75% in China and 107–178% in India. China realized 74–89% of this growth potential from the 1980s to 2009. In addition, this productivity gain is accompanied by a decrease in the correlation of intergenerational incomes.

Keywords: human capital; intergenerational income mobility; intergenerational occupational mobility; labor productivity; occupational inheritance (search for similar items in EconPapers)
JEL-codes: E24 J24 O11 O4 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1515/bejm-2018-0030

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