Are cadre offspring in the fast lane? Evidence from the labour market for college graduates in China

Abstract

This paper studies the impact of having a cadre parent on the labour market performance and channels of the intergenerational transference. Using a recent data set, we find that college graduates with a cadre parent earn a wage premium of 4.46% more than those who do not. They also demonstrate advantages in obtaining a household registration (hukou), entering high-level occupations, and achieving job satisfaction. In the discussion on channels, we first show that aggressive self-investment serves as one potential channel but can only explain limited amount of the premiums. To test the other channel – interpersonal network (guanxi), we provide evidence that cadre offspring demonstrate more extensive family network resource and information advantage when searching for jobs. This channel is also supported by the finding that working closer to parents geographically or institutionally would enhance the effect of having a cadre parent.