The power of education: The intergenerational impact of children’s education on the poverty of Chinese older adults

Abstract

This paper estimates the causal impact of adult children’s education on parental multidimensional poverty to evaluate the intergenerational poverty reduction effect. We exploit exogenous variation in the temporal and geographical impacts of the 1986 Compulsory Schooling Laws in China to construct an instrumental variable. We find that increases in children’s education significantly reduce the incidence of parental multidimensional poverty. The effects are stronger for fathers and parents who live in rural areas and have children with high income. Further evidence discusses the potential channels, such as intergenerational support, financial behaviors, and social networks.