The intergenerational inequality of health in China Tor ERIKSSON a,1 , Jay PAN b,2 , Xuezheng QIN c, ⁎ a Department of Economics and Business, Business and Social Sciences, Aarhus University, Fuglesangs Allé 4, Building 2632/L111, 8210 Aarhus V, Denmark b West China School of Public Health, Sichuan University, Western China Research Center for Rural Health Development, Sichuan University, Chengdu 610041, China c School of Economics, Peking University, China article info abstract Article history: Received 30 August 2013 Received in revised form 9 June 2014 Accepted 9 June 2014 Available online xxxx This paper estimates the intergenerational health transmission in China using the 1991–2009 China Health and Nutrition Survey (CHNS) data. Three decades of persistent economic growth in China has been accompanied by high income inequality, which may in turn be caused by the inequality of opportunity in education and health. In this paper, we find that there is a strong correlation of health status between parent and their offspring in both the urban and rural sectors, suggesting the existence of intergenerational health inequality in China. The correlation is robust to various model specifications, including the control of unobserved household heterogeneity using instrumental variables. We also find that parents' socio-economic characteristics and environmental choices are strongly correlated with their own and their children's health, supporting the “nature–nurture interaction” hypothesis. The Blinder–Oaxaca decomposition further indicates that 15% to 27% of the rural–urban inequality of child health is attributable to the endowed inequality from their parents' health. An important policy implication of our study is that the increasing inequality of income and opportunity in China can be ameliorated through the improvement of the current generation's health status and living standards. © 2014 Elsevier Inc. All rights reserved. JEL classification: I14 I12 Keywords: Intergenerational transmission Health Inequality China 1. Introduction and Background Three decades of persistent high economic growth in China has been accompanied by an increasing inequality in income. A growing literature has documented and analyzed the sources of the internationally large income differences between individuals, households, regions and urban/rural areas (Shi & Sicular, 2012). Considerably less attention has been paid to income mobility over individuals' life cycles and the intergenerational persistence of income differences. As for the latter, four recent studies (Eriksson & Zhang, 2012; Gong, Leigh, & Meng, 2012; Quheng, Gustafsson, & Shi, 2013; Zhang & Eriksson, 2010) have documented (i) internationally high and persistent inequality in opportunity, (ii) that income inequality is to a high extent explained by inequality of opportunity, and (iii) there are high and persistent income correlations between parents and their offspring in the rural as well as the urban areas in China. While this research implies that the high levels of income inequality are very likely to persist in the future, it does not inform us how this development can be turned around as we know relatively little about which mechanisms are important in generating the low level of intergenerational mobility. Two prime candidates are inequality of opportunities in education and health (Zhang & Kanbur, 2005). The current paper is concerned with the latter. The paucity of research based knowledge about the underlying mechanisms of intergenerational income inequality does not only pertain to China but also more generally to the international literature on intergenerational mobility. 3 In developing countries, health China Economic Review xxx (2014) xxx–xxx ⁎ Corresponding author at: School of Economics, Peking University, Beijing 100871, China, Tel.: +86 10 6275 7237; fax: +86 10 6275 4237. E-mail addresses: tor@asb.dk (T. Eriksson), panjie.jay@gmail.com (J. Pan), qin.econpku@gmail.com (X. Qin). 1 Tel.: +45 871 64978. 2 Tel.: +86 28 8550 1272; fax: +86 28 8550 1528. 3 For one of the few exceptions, see Lefgren, Lindquist, and Sims (2012). CHIECO-00739; No of Pages 18 http://dx.doi.org/10.1016/j.chieco.2014.06.005 1043-951X/© 2014 Elsevier Inc. All rights reserved. Contents lists available at ScienceDirect China Economic Review Please cite this article as: Eriksson, T., et al., The intergenerational inequality of health in China, China Economic Review (2014), http://dx.doi.org/10.1016/j.chieco.2014.06.005