Income inequality, occupational choice, and intergenerational mobility in China

The paper examines the intergenerational mobility using the 2010–2018 China Family Panel Studies data. Utilizing a structural equation model, we investigate the channels through which parents affect their children’s occupational choices. Furthermore, we explore the nonlinear relationship between paternal income and offspring occupational status using threshold regression and varying-coefficient models, quantifying the mediating role of offspring education. Our empirical analysis reveals that paternal income affects the acquisition of offspring occupational status through three primary channels: investment in education, enhancement of offspring work abilities, and direct wealth transfer. When paternal income is below a certain threshold, educational investment primarily enhances children’s occupational status. However, parents also exert influence above this threshold through the other two channels. The relationship between paternal income and offspring’s occupational social status is nonlinear, with higher paternal income having a more substantial impact on improving offspring’s occupational status. Offspring education is a significant mediating variable, accounting for approximately 80% of the influence of paternal income on occupational social status across the full sample. This mediating effect also exhibits gender heterogeneity, with male offspring relying more on paternal investment in education.