This paper studies how parental income shapes children’s income through their career path choices. I first classify careers by expected returns, entry cost, and earnings risk. Using NLSY data, I show that children from higher-income families are more likely to enter more costly and riskier careers. I then develop an overlapping-generations model with endogenous career choice, where careers are heterogeneous in terms of entry costs and earnings risk. I use the estimated model to decompose intergenerational income persistence. Eliminating financial advantages associated with parental resources—funding entry costs and insuring children against earnings risk—reduces intergenerational income persistence by nearly 90%, while removing ability transmission reduces it by 17%. Removing only the parental insurance channel reduces the earnings IGE by 30%, indicating that differences in career-specific earnings risk, and parents’ ability to insure against it, form an important underlying mechanism of intergenerational mobility. Counterfactual policy experiments show that targeting high-ability students from low-income families is the most effective strategy to enhance both intergenerational mobility and welfare, followed by subsidies for “safe” careers such as engineering, teaching/health, and skilled trades.
I build a dynamic life-cycle model of fertility and female labor supply with hu- man capital accumulation to study how the fertility policy in China affect women’s fertility choice and labor supply choice. I include ’fertility penalty’ and ’young child penalty’ in the model. I use CFPS 2010-2020 to estimate the model by Maximum Likelihood Estimation. In general, the model fits the data well. I find little evidence for ’fertility penalty’ and ’young child penalty’. Then I conduct two counterfactual policies. If the government remove all restriction on fertility, the proportion of work- ing women will increase by 2 percent and and the ratio of new babies to childbearing women will increase from 12% to 20%. If the government provides additional 500 yuan per month subsidy for each child, female labor supply will drop by 1% and the ratio of new babies to childbearing women will increase from 20% to 24%.
This paper investigates the impact of a more stringent wastewater discharge stan- dard, implemented on January 1, 2007, on employment in Jiangsu’s chemical industry. Using enterprise-level data from the China Industrial Enterprise Database (2004–2009) and employing difference-in-differences (DID) and triple-differences (DDD) models, I find that the overall DDD estimates for employment are statistically insignificant. Mechanism analysis reveals, however, that the regulation reduces output by 4.6%, lowering labor demand, and decreases total factor productivity (TFP) by 6%, which increases labor demand to produce a given level of output. These opposing forces ap- pear to partially offset each other, yielding no detectable net effect on employment. Importantly, the results reveal substantial heterogeneity by ownership, with private firms bearing measurable economic costs.