Father competition: The career e ffects of having a cadre parent

The objective of this study to explore the labor market outcomes of parental political capital on people's labor market outcomes in urban China. Parents’ cadre-status is used as a proxy of parental political capital. “Cadre” is defined as people in administrative positions in governments and pseudo-government organizations (state-owned enterprises (SOEs), and public organizations). Two major questions are examined: 1) whether individuals with a cadre parent have better promotional prospects? 2) Whether individuals with a cadre parent have higher wage premiums compared to their counterparts without a cadre parent? Whether this wage premium is prominent along individuals’ income distribution? After answering these questions, efforts are made to examine the possible channels that lead to the cadre parent premium. Three major channels are considered: 1)Pre-labor market human capital differences between individuals from cadre families and non-cadre families, in terms of both quantity and quality. 2)Social network differences between individuals from cadre families and non-cadre families. 3) Whether cadre parent premium is associated with specific institutional context in China’s transitioning labor market?

The data used in this study is China General Social Survey (CGSS)data. CGSS is the first continuous national social survey project in mainland China, which covers 28 out of 31 provinces, municipalities, and autonomous regions. The sample is restricted to working-age individuals (18-59 for men and 18-55 for women) with urban Hukou (urban household registration identity).

This study contributes to the current literature in the following aspects. Empirically, individuals with a cadre parent tend to have higher promotion rates and a significant wage premium over those without a cadre parent. The magnitude of the premium is the highest in the middle income groups. This premium cannot be explained by the observed human capital differences, but is partly associated with individuals' social networks. The results highlight that the cadre-parent wage premium is prominent when individuals are in public-owned enterprises (POEs), or when they are cadres themselves. This implies that the value of parental political capital is associated with particular institutional domains (SOEs or cadre status) in which it serves to secure, or even enhance the offspring's labor market advantage. Finally, intergenerational income transition matrices show that a cadre-parent wage premium increases the income persistence in the high income group, and promotes the upward income mobility for the low income group. Being a cadre in China not only benefits the current generation, but also transmits advantages beyond parental income to the second generation.