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This paper extends the Becker-Tomes model of intergenerational educational mobility to a rural economy characterized by farm-nonfarm occupational dualism and provides a comparative analysis of rural China and rural India. The model builds a micro-foundation for the widely used linear-in-levels estimating equation. Returns to education for parents and productivity of financial investment in children's education determine relative mobility, as measured by the slope, while the intercept depends, among other factors, on the degree of persistence in nonfarm occupations. Unlike many existing studies based on coresident samples, our estimates of intergenerational mobiity do not suffer from truncation bias. The sons in rural India faced lower educational mobility compared with the sons in rural China in the 1970s to 1990s. To understand the role of genetic inheritance, Altonji and others (2005) sensitivity analysis is combined with the evidence on intergenerational correlation in cognitive ability in economics and behavioral genetics literature. The observed persistence can be due solely to genetic correlations in China, but not in India. Fathers' nonfarm occupation and education were complementary in determining a sons' schooling in India, but separable in China. There is evidence of emerging complementarity for the younger cohorts in rural China. Structural change in favor of the nonfarm sector contributed to educational inequality in rural India. Evidence from supplementary data on economic mechanisms suggests that the model provides plausible explanations for the contrasting roles of occupational dualism in intergenerational educational mobility in rural India and rural China.
Coresidency Bias --- Economics of Education --- Education --- Educational Mobility --- Farm-Nonfarm Complementarity --- Intergenerational Mobility --- Labor Market --- Occupational Dualism --- Rural Development --- Rural Economy --- Rural Education --- Rural Labor Markets
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As the glittering skyline in Shanghai seemingly attests, China has quickly transformed itself from a place of stark poverty into a modern, urban, technologically savvy economic powerhouse. But as Scott Rozelle and Natalie Hell show in Invisible China, the truth is much more complicated and might be a serious cause for concern. China’s growth has relied heavily on unskilled labor. Most of the workers who have fueled the country’s rise come from rural villages and have never been to high school. While this national growth strategy has been effective for three decades, the unskilled wage rate is finally rising, inducing companies inside China to automate at an unprecedented rate and triggering an exodus of companies seeking cheaper labor in other countries. Ten years ago, almost every product for sale in an American Walmart was made in China. Today, that is no longer the case. With the changing demand for labor, China seems to have no good back-up plan. For all of its investment in physical infrastructure, for decades China failed to invest enough in its people. Recent progress may come too late. Drawing on extensive surveys on the ground in China, Rozelle and Hell reveal that while China may be the second-largest economy in the world, its labor force has one of the lowest levels of education of any comparable country. Over half of China’s population—as well as a vast majority of its children—are from rural areas. Their low levels of basic education may leave many unable to find work in the formal workplace as China’s economy changes and manufacturing jobs move elsewhere. In Invisible China, Rozelle and Hell speak not only to an urgent humanitarian concern but also a potential economic crisis that could upend economies and foreign relations around the globe. If too many are left structurally unemployable, the implications both inside and outside of China could be serious. Understanding the situation in China today is essential if we are to avoid a potential crisis of international proportions. This book is an urgent and timely call to action that should be read by economists, policymakers, the business community, and general readers alike.
Economic development --- Rural poor --- Equality --- Education --- Regional disparities. --- Health --- China --- Economic conditions --- China, rising China, rural China, economy, growth, stagnation, global, inequality, urban, rural, human capital, education, middle class, class, manufacturing, development, factory, hukou, worker, labor, unskilled labor, wage, wage rate, skill, low-skilled labor, planning, central planning, planned economy, market economy, superpower, race to the bottom, middle income trap, labor mobility, investment, human investment, countryside, poverty, nutrition, rural education action program, healthcare, public health, unemployment, nationalism, agriculture, demography, the other China, children, one-child policy, gender imbalance, surplus labor, inequity.
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