Educational Differences in Housing Wealth Trajectories and Wealth Accumulation across Generations in China

• In Event: Inequality, Poverty, and Mobility Section Roundtables
  In Refereed Roundtable (60 minute): 1. Perspectives on Inequality in China

Abstract

Prior research shows that college graduates accumulate more wealth than non-graduates across the life course, with gaps especially pronounced in younger generations in the United States, largely due to stock-linked asset expansion. Whether the same mechanism explains China’s similar patterns of educational wealth accumulation remains unclear. This study uses China—where financialization is centered on housing rather than stocks—to examine how educational differences in housing wealth trajectories shape inequality across generations. Data from the Chinese Household Income Project (CHIP, 1995, 2002, 2008) and the China Family Panel Studies (CFPS, 2010, 2012, 2014, 2016, 2018, 2020, 2022) show that the college premium in housing wealth increases with age and is especially pronounced in younger generations. For the 1950–1959 cohort, housing surpassed safe financial assets as the dominant contributor only after midlife, explaining most of the premium, whereas later cohorts reached this point much earlier; stocks remained marginal for all cohorts born after the 1950s. Housing returns account for a substantial share of the college wealth premium, particularly after midlife and among younger generations. These findings demonstrates that China’s housing-centered financialization has made housing assets the critical engine of educational wealth inequality across generations, in contrast to the U.S. stock-centered pathway.

Author

• Zhi Li