Can Two Consecutive Generations’ Data Predict Longterm Intergenerational Transition? Evidence from China with three generations

Most of the studies on long-term intergenerational human capital transition are restricted to two consecutive generations based on the Becker-Tomes model, and assume that the transition will be wiped out during the third generation. However, in developing countries such as China, ancestors play a key role in the family decision-making process. Thus, this research uses a data set of China rural households, which includes three generations of data, to analyze the long-term intergenerational transition. The results provide empirical evidence that separate generations have had an independent and significant influence on the offspring’s human capital outcome. Precisely, the grandparent generation influences the child generation independently rather than influencing the child generation through the parent generation. Therefore, the influence of generations on educational achievements has been overestimated by the data that only encompass two consecutive generations