Initiative for U.S.-China Dialogue on Global Issues

In this seminar, Hongbin Li of Stanford University discussed research conducted in collaboration with Ruixue Jia of the University of California, San Diego and Lingsheng Meng of the Chinese University of Hong Kong. Using survey data from 32,000 people, the authors empirically investigate how receiving an elite college education affects social mobility in China. At a level similar to prior literature, the authors find a strong correlation between college graduates’ income and their parents’ income. However, the impact of receiving an elite college education in moving up the income ladder is much larger: it is twice as large as that of moving parental income from the bottom to the top quintile. Elite education is not only a more important predictor of income, but it is also accessible to students from lower-income families. In fact, the data indicates that students from lower-income backgrounds only have a slight disadvantage in admission to elite colleges. The disadvantage is due to their lower score in the National College Entrance Exam; conditional on scoring above the elite college admission cutoff scores, students from low- and high-income families have an equal chance of elite college admission. These results together suggest that access to elite education through China’s exam-based college admission system is an important mechanism to increase social mobility, at least among those who have a college degree. However, the authors do not deny the importance of family background. In fact, the evidence indicates that elite education cannot alter the correlation of income ranks across generations. Although an elite college education does not affect the probability of a college graduate entering into an elite occupation or industry, parental backgrounds do.