A Generalized Mediation Analysis of Intergenerational Income Elasticity (IGE)

This study systematically examines the determinants and pathways of intergenerational income elasticity (IGE) in China, highlighting the explanatory power of parental occupations. Using data from the China Family Panel Studies (CFPS) (2010–2022), we employ decomposition frameworks and layered mediation analysis to disentangle the complex mechanisms underlying income persistence. The findings reveal that parental income alone explains a limited portion of income mobility, while parental occupations emerge as significant independent contributors, even after controlling for education, urban-rural status, and regional economic conditions. Through mediation analysis, education years, industry selection, and social capital are identified as key channels through which parental occupations influence child income. The results underscore the importance of addressing structural advantages embedded in occupational hierarchies, suggesting that policy interventions should extend beyond educational improvements to include targeted measures addressing occupational barriers and inherited advantages.