Entrepreneurship and Household Income Mobility in China
The recent meeting of the Financial and Economic Commission of the CPC Central Committee highlighted the importance of creating clear pathways for upward mobility to achieve common prosperity.It was also emphasized that supporting entrepreneurial leaders in their pursuit of wealth should be a top priority.China has made significant strides in improving its entrepreneurial environment thanks to favorable government policies,increased financial support,a shift in cultural attitudes,and evolving social norms.As a result of these efforts,China now boasts one of the top G20 economies in terms of its comprehensive index of entrepreneurial environment.The majority of people,almost 80％,believe entrepreneurship is an ideal career.Then,Household entrepreneurship in China is experiencing significant growth in both number and scale.As of June 2023,there are 116 million registered individual industrial and commercial households formed by household entrepreneurship in China,accounting for about 67.4％of all registered market entities.Entrepreneurship presents opportunities for upward mobility but also carries significant risks of downward mobility.Analyzing the impact of entrepreneurship on Chinese household income mobility can clarify its role in promoting upward mobility and improving economic efficiency.This paper uses CHFS data in 2013,2015,2017,and 2019,combined with income transfer matrix analysis and empirical analysis,to study the impact of household entrepreneurship on household income flow and income mobility.The analysis of the income transfer matrix shows that household entrepreneurship improves income mobility and improves the quality of income mobility.The empirical study found that starting and continuing business significantly promoted household upward mobility,while quitting business significantly promoted household downward mobility.Entrepreneurship significantly promotes upward household income mobility.Further analysis shows that opportunistic entrepreneurship is more conducive to household upward mobility than survivorship entrepreneurship.Entrepreneurship is more conducive to upward household mobility than self-employment.Business continuity helps households move into high-income groups and smooths the path of upward mobility.Entrepreneurship is more conducive to upward mobility for rural households than for urban households.As businesses age and initial investment increases,continuing operations increasingly contribute to upward mobility.Only some scholars have studied the relationship between household entrepreneurship and income mobility,and the understanding of the perspective of income mobility quality analysis needs to be deepened.The marginal contribution of this paper is mainly reflected in the following three aspects.First,in terms of research methods,different from the income transfer matrix analysis used in existing literature,this paper uses causal analysis to study the impact of starting,quitting,and continuing business on household income flow.Second,different from the quartile income transfer matrix constructed in previous literature,this paper optimizes the matrix to the percentile income transfer matrix to fully retain the income flow information.Third,most of the existing literature focuses on the size and change trend of income mobility,and few literatures pay attention to the importance of quality evaluation of income mobility.This study shows that entrepreneurship can promote household income mobility.Appropriately increasing entrepreneurship support can promote household income flow.Considering the limited resources,the government should provide more precise entrepreneurship support policies for different groups.First,the government should implement differentiated entrepreneurship support policies according to the development stage of enterprises.Second,categorize and support household entrepreneurship to smooth the transformation and upgrading channels of household entrepreneurship.Third,continue to strengthen the construction of rural infrastructure,focusing on supporting and nurturing rural household entrepreneurship.
Household EntrepreneurshipHousehold Income MobilityIncome MobilityTransfer Matrix
万方数据
维普
