Estimating Nonlinear Intergenerational Mobility in China with an Analysis of Influencing Factors

Zongwu Cai, Weitong Wang and Jing Yuan
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Zongwu Cai: Department of Economics, The University of Kansas, Lawrence, KS 66045, USA
Weitong Wang: School of Economics, Dongbei University of Finance and Economics, Dalian, Liaoning 116025, China
Jing Yuan: School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China

No 202602, WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS from University of Kansas, Department of Economics

Abstract: This paper integrates income inequality and intergenerational mobility (IGM) under a unified framework, providing a theoretical basis for the nonlinear measurement of IGM. Also, it proposes using a nonparametric quantile regression gradient boosting tree model to estimate the China’s nonlinear IGM elasticity and to study the interactive effects of macro-micro determinants. The empirical results show that using the nonlinear IGM elasticity, IGM should be significantly enhanced, with the maximum increase reaching 12.92%. Furthermore, the fitting of the nonlinear quantile regression gradient boosting tree model is superior to that of the linear quantile regression model. The nonlinear characteristics are particularly significant for the population with an annual income between 30,000 yuan and 150,000 yuan. China’s intergenerational income elasticity lies between 0.1861 and 0.7026, and parental income evidently affects offspring income with a “strong two-tailed and weak middle†pattern. Moreover, there are income and regional heterogeneities in the characteristics of IGM, and there are significant differences in the income transmission process and the degree of nonlinearity among different regions. Finally, this paper explores IGM traits of income spectrum extreme groups and the “poverty trap†in China. The results show that the most important influencing factors for achieving income class crossing are economic growth, industrial optimization, intergenerational educational mobility, and wealth capital investment.

Keywords: Income inequality; Intergenerational mobility; Nonlinearity; Quantile regression gradient boosting tree; Partial dependence relationship (search for similar items in EconPapers)
JEL-codes: C43 D63 I31 J62 (search for similar items in EconPapers)
Date: 2025-03, Revised 2026-01
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