Estimation of Nonlinear Intergenerational Mobility and Analysis of Influencing Factors from Perspective of Income Inequality

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 202505, WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS from University of Kansas, Department of Economics

Abstract: This paper adopts the idea from Maasoumi et al. (2022) to consider a non-linear model based on Gini coefficient to measure intergenerational mobility from the perspective of social equity. In this model, income inequality and intergenerational mobility are unified, which provides a theoretical basis for the future nonlinear measurement of intergenerational mobility. Also, this paper considers both macro and micro factors, including economic growth, industrial optimization and social welfare changes, the micro factors include human capital investment (education), social capital investment (social network) and wealth capital investment. Furthermore, the quantile regression gradient boosting tree model is used to study the nonlinear effect by using partial dependence relationship technique. Finally, in terms of the heterogeneity and mechanism of influence, this paper divides the population into middle-high and low-income groups according to the income of the parents and offspring, and discusses whether the relevant factors have the heterogeneity effect in the population with different characteristics, the reasons of heterogeneity are explored, and for high-income families, policies should regulate wealth capital investment to prevent intergenerational wealth stagnation. Most importantly, this paper explores the intergenerational mobility characteristics of two groups: those with low-income parents but middle-to-high-income children, and with high-income parents but middle-to-low-income children. It then puts forward more targeted policy suggestions for different groups. This study provides new insights into nonlinear mechanisms of intergenerational mobility in China, offering policy implications for reducing income inequality.

Keywords: Income inequality; Intergenerational mobility; Quantile regression gradient boosting tree; Partial dependence relationship (search for similar items in EconPapers)
JEL-codes: C43 D63 I31 J13 J62 (search for similar items in EconPapers)
Date: 2025-03, Revised 2025-03
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