Family Background, Educational Returns and Income Inequality

In China, family background has an important impact on the returns on education, which in turn influences the degree of income inequality. This paper uses propensity score matching model to eliminate the influence of selective bias and estimate the educational return rate of children in different family backgrounds. It is found that the higher the education level of fathers, the lower the returns on education of children; the return rate of education for fathers who are party members and their children is higher; the returns on education for children of agricultural households is higher than that of non-agricultural households.