China after half a century: Individuals whose grandparents belonged to the pre-revolution elite earn 16 pct more income and have completed more than 11 pct additional years of schooling than those from non-elite households

Persistence Despite Revolutions. Alberto F. Alesina, Marlon Seror, David Y. Yang, Yang You & Weihong Zeng. NBER Working Paper 27053. Mar 2021. DOI 10.3386/w27053

Abstract: Can efforts to eradicate inequality in wealth and education eliminate intergenerational persistence of socioeconomic status? The Chinese Communist Revolution and Cultural Revolution aimed to do exactly that. Using newly digitized archival records and contemporary census and household survey data, we show that the revolutions were effective in homogenizing the population economically in the short run. However, the pattern of inequality that characterized the pre-revolution generation re-emerges today. Almost half a century after the revolutions, individuals whose grandparents belonged to the pre-revolution elite earn 16 percent more income and have completed more than 11 percent additional years of schooling than those from non-elite households. We find evidence that human capital (such as knowledge, skills, and values) has been transmitted within the families, and the social capital embodied in kinship networks has survived the revolutions. These channels allow the pre-revolution elite to rebound after the revolutions, and their socioeconomic status persists despite one of the most aggressive attempts to eliminate differences in the population.

The Economist The grandchildren of China’s pre-revolutionary elite are unusually rich:

Selection through violence targeting the pre-revolution elite

One may speculate that the pattern of persistence among the pre-revolution elite is driven by selective violence against the elite during the Communist and Cultural Revolutions. If killing and violence were more intense in historically less unequal places and more successful among individuals with fewer resources and a lower capacity to resist, or among those unable to ensure that their descendants perform well, then such a selection could generate a pattern of persistence and upwardly bias the estimates on intergenerational persistence.

We examine the relationship between pre-revolution local inequality (such as the landlord share of the population or land ownership Gini coefficients) and the intensity of violence (both cases of killings and cases of persecutions) reported in the corresponding counties.26 We find that violence was not associated with regional inequality prior to the revolutions: this is the case for the violence both during the Communist Revolution (see Appendix Table A.11), and during the Cultural Revolution (see Appendix Table A.12). More importantly, the systematic killing of landlords and rich peasants was limited in scale as most of the pre-revolution elite survived the revolutions. The observed overall level of violence, albeit not zero, was too low to drive the persistence pattern that we document.

6 Conclusion

This paper investigates the extent to which efforts to eradicate inequality in wealth and education can shut off intergenerational persistence of socioeconomic status. We find that the Communist and Cultural Revolutions in China — among the most radical social transformations in recent human history — prevented the elite from transmitting to their children physical capital and human capital acquired from formal schooling. Nonetheless, the grandchildren of the pre-revolution elite, growing up after the revolution ended, systematically bounce back and earn substantially higher income than their peers. We show that two channels — the transmission of human capital through families, and the survival of social capital manifested in kinship-based networks — contribute to the pre-revolution elite’s persistence despite the revolutions. These channels, both centered around families, have been extraordinarily resilient despite such broad and deep institutional and political changes as the Chinese revolutions brought about. Thus, these channels may be largely and generally immune to policy interventions that aim to level the playing field, making them powerful sources of persistence across generations. One may only speculate that had the Chinese revolutions involved mass killing of the elites themselves, lasted for more than one generation, or directly targeted transmission within the family sphere, the younger generation would be prevented from co-residing or exchanging with those who grew up prior to the revolutions. As a result, human capital transmission within families as well as family-based social capital among the elite may become severely undermined. Since policies targeting intergenerational mobility as extreme as the Chinese revolutions — let alone those more extreme — are exceptionally rare, intergenerational persistence would likely endure.