Compulsory education law and intergenerational income mobility in China

Intergenerational income mobility serves as a key indicator of equality of opportunity and social stratification. Education is widely seen as a vital pathway for enhancing social mobility. This paper examines China's Compulsory Education Law of 1986 and analyzes its effects on intergenerational income mobility.

Using data from the China Household Income Project, this study constructs matched samples of parents and adult children. Income adjustment and Heckman selection models are employed to correct measurement errors and co-residence selection bias. A difference-in-differences approach is used to identify the causal effects of the policy, supplemented by triple differences, event-study designs, and other robustness checks.

The study finds that the Compulsory Education Law significantly reduced intergenerational income correlation, thereby increasing income mobility. The mechanism analysis shows that the policy significantly reduced inequalities in access to junior secondary education and non-agricultural employment opportunities, thereby enhancing intergenerational income mobility. Yet, persistent inequalities in access to senior secondary education and high-status occupations, together with class-based differences in returns to education, may have partially offset these gains. The heterogeneity analysis further shows that the policy had a stronger effect on intergenerational mobility among urban households compared with rural ones, while no significant differences were observed by gender.

Expanding access to compulsory education can, to some extent, weaken the intergenerational transmission of economic advantages and promote social mobility, although its effects vary across social groups. The findings provide empirical evidence for ongoing policy debates on whether to extend the duration of compulsory education and offer broader insights into the dynamics of social mobility in developing economies.