Abstract: Intergenerational raising is usually a rational choice for workers to increase their family income. However, in the labor market, the causal relationship and micro-mechanism of income increase through intergenerational raising has yet to be confirmed. Findings of empirical research based on “China Employer-Employee Survey” (CEES) are as follows. First, results of the benchmark regression show that the wages of labors in the sample with intergenerational raising are significantly higher than that of the sample without it. Second, using instrumental variables such as short-term extended working hours (overtime work) and long-term human capital accumulation (promotion) to analyze the effect mechanism of intergenerational raising on income increase, we find the latter is stronger. Third, intergenerational raising has a more significant impact on the labor income of non-agricultural households and those with higher education levels (college degree or above). It is suggested that intergenerational raising does help workers relieve the pressure of parenting and give them the opportunity to obtain higher income. From the perspective of maximizing the effectiveness of family's goal through decision making and intergenerational support, the existence of intergenerational raising is reasonable, which also reflects the modern inheritance of traditional culture of intergenerational support in Chinese families. On the other hand, we should also be aware of a series of social problems. The feasible solution to these problems is using stable social policies and sufficient market service supply to replace the unstable grandparents' intergenerational support. As for social policy, it is essential to formulate a child friendly family policy whose key is to formulate a flexible labor employment policy, extend the maternity leave appropriately, implement the full coverage of male companying childbirth, and encourage parents to actively participate in the care of their children. As for market service supply, the community can be encouraged to unite with social service institutions to carry out community activities for both grandparents and grandchildren in families with intergenerational raising, which can optimize the child rearing environment and better meet the aspirations of the elderly for a better life.

Key words: intergenerational raising, labor wage, human capital accumulation, mediating effect