Intergenerational mobility (IGM), that is, mobility across generations is a major indicator of economic progress. Corak ( 2013) discusses the relationship between intergenerational elasticity of income and income inequality and derives the “Gatsby Curve.” He finds that the United States is characterized by high intergenerational income elasticity ( low relative mobility) and high income inequality. The Nordic countries, on the other hand, have low intergenerational income elasticity and low income inequality. This paper examines intergenerational mobility and inequality in China and India, the two largest emerging countries. In the literature two types of IGM have been considered: a) absolute upward IGM which measures the extent to which the levels of education or income of the current generation are higher than those of their parents and b) the relative IGM which measures the extent to which an individual’s position on the economic ladder is independent of the socio-economic position and characteristics of his or her parents.
For data on various measures of intergenerational mobility, this paper relies on the Global Database on Intergenerational Mobility, released recently by the World Bank. The paper examines various measures of intergenerational mobility and inequality in China and India.
Preliminary findings show that: a) income inequality is higher in China than in India; b) absolute intergenerational mobility appears to be the same in China and India; and c) relative mobility in income and education is higher in China than in India. The paper discusses reasons for higher relative mobility in China compared to India.