Intergenerational Mobility in Hong Kong, 1976-2016

Li Yang, Junpeng Zhang () and Zhejin Zhao
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Li Yang: Center for European Economic Research (ZEW) - Center for European Economic Research (ZEW), PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Junpeng Zhang: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Zhejin Zhao: HIT - Harbin Institute of Technology

World Inequality Lab Working Papers from HAL

Abstract: Using a large census dataset spanning 40 years, this paper presents the first comprehensive study of intergenerational absolute income mobility in Hong Kong, by employing the copula and marginals approximation method. The main findings indicate a significant decrease in absolute income mobility, declining from 85% in the 1976 cohort to 55% in the 1996 cohort. In 1976, Hong Kong's absolute income mobility(AIM) exceeded that of major higher-income countries, but within 40 years, it converged to the level of the United States and Europe. This decline is primarily attributed to decelerating GDP growth rather than increased income inequality. Our findings remain robust under various alternatives of copula forms and different birth cohorts. Notably, our innovative decomposition of the education factor reveals that education plays a crucial role in mitigating the decline in absolute mobility. We argue that the rapid economic growth of China and the expansion of Hong Kong's tertiary education play important roles in shaping intergenerational income mobility in Hong Kong.

Date: 2024-12
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