Intergenerational mobility of relative poverty and its mechanism in rural China

Using China Family Panel Studies data, this paper analyzes intergenerational mobility of relative poverty and its mechanism through transition matrix, Probit model, 2SLS model and Bowles-Gintis decomposition method. The results show that 76.0% of the offspring with relatively poor parents exit relative poverty, and only 23.9% of the offspring with not relatively poor parents become relatively poor. Parents' income affects offspring's mainly through offspring's work, rather than their education. One possible reason is that early engagement in manual work crowds out their educational acquisition. Furthermore, women are disadvantaged in the intergenerational mobility. Reducing the cost of education, improving the quality of employment and focusing on female groups will better facilitate intergenerational mobility in rural China.