Hard Working Is More Important than Destiny

Abstract

This paper studies the intergenerational income mobility using XGBoost and SHAP. We show that child's educational attainment is more important than parents' income or other family characteristics for predicting child's income and it is still being the second most important variable after conditional on these characteristics. We also show that educational attainment can reduce the impacts of parents' income on child's income and has more impacts on income for non-white children. The findings imply that working hard to earn higher educational attainment can be more important than being born in a rich and white family (i.e., kind of destiny).