Intergenerational wealth transfer and family investment in shadow education: Empirical evidence from housing in China

Abstract

Abstract The widespread phenomenon of parents providing housing support for adult children in Chinese society constitutes a form of intergenerational transfer of wealth that constitutes one of the sources of family wealth accumulation and also has an impact on children's investment in education. This paper uses data from the China Household Income Survey (CHIP) in 2018 to examine the impact of intergenerational transfer of wealth in the form of housing support on household spending on shadow education and educational equity. The empirical results of this paper show that housing support significantly increase household shadow education expenditure, and the effect increases after controlling for the "house slave" effect. After solving the endogenous problem with propensity matching score (PSM) and instrumental variable method (IV), the conclusion still holds. Household income, subsistence consumption, and household financial assets constitute the influence channels of the relationship between housing support and shadow education expenditure. The heterogeneity analysis found that housing support had a greater impact on shadow education expenditure among low-income families than on middle- and upper-income families, promoting educational equity. In areas with low pressure on college entrance examinations, the impact of housing support on shadow education expenditure has been further strengthened, weakening educational equity.